America's presidential elections, right now, are all about Republican presidential hopefuls fighting it out to for the right to challenge Barack Obama in November.

But most of the energy and passion and campaign money of the ethnic group that has the highest median income in the US are directed towards the Democratic president. Obama is the hot favourite with the wealthy and influential Indian-American community.

Obama is expected to face a tough re-election battle in November. However, among Indian-American voters he holds a clear advantage, interviews with a cross-section of the community, including Democratic and Republican operatives and activists, show. Indian-Americans may make up only about 1% of the US population, but their wealth matters.

A review of campaign finance data compiled by the Center for Responsive Politics reveals that at least seven Indian-Americans are among the 350 top Obama supporters who each helped raise a minimum of $50,000 (Rs 26 lakh) in the current election cycle. These seven individuals raised between $850,000 and $2 million. One of them is Frank Islam, a Washington area businessman who has given some $350,000 to various candidates and campaigns.

Islam, who runs an investment firm, said he is as enthusiastic about Obama as he was in 2008. "I give money because I strongly believe we must elect representatives who can rejuvenate the middle class and who can reignite manufacturing sectors and unleash the potential for small businesses and entrepreneurs," said Islam, who emigrated from India in the 1960s.

Just Like 2008

The current favourite among Republican candidates, Mitt Romney, co-founder of private equity firm Bain Capital, has been excoriating Obama for the latter's "poor handling" of the economy. This doesn't necessarily play with Indian-Americans.

Sunny Wycliffe, an Indian-American community leader in the Washington area and long-time Democratic supporter, said the sour economy hasn't tempered his backing for the president. And he believes many of his friends within the community, who supported Obama during his historic 2008 run, will vote for the president again.

"People see what is happening," Wycliffe said. "The economy is slowly getting better. The president has eliminated Osama bin Laden and he has also pulled out troops from Iraq, as promised."

Though there have been quite a few setbacks in the India-US relations lately, including the failure of the Americans to win an Indian contract for multirole combat aircraft and the troubles that Indian software companies are facing with visas, they do not seem to have any significant bearing on the community's support. Likewise, outsourcing, a potent issue in 2004 and, to some extent, in 2008, has not emerged as a big campaign theme so far.

There are a number of reasons Obama still holds substantial support among Indian-Americans. Historically, like many immigrant groups, Indian-Americans have been voting more Democratic than Republican even though the two highest-ranking elected officials to date from within the community, Governors Bobby Jindal of Louisiana and Nikki Haley of South Carolina, are both Republicans.

Romney's Error

Even some Republicans agree that it is an uphill battle for the party's nominee against the incumbent president despite his troubles on the economic front.

Puneet Ahluwalia is chairman of the Indian American Republican Committee in Fairfax, Virginia and affiliated to the campaign of Republican candidate, Newt Gingrich. He argues that Obama has a disadvantage with the Indian-American business community. A sizeable section of the community is employed in IT, whose performance is connected to the overall economic health. Since a substantial number of Indian-Americans also earn well over $200,000, for them issues such as tax cuts are important, he said.

"They are seeing more [economic] success in India than here, but at the emotional level, the community tends to connect with Obama," Ahluwalia said.

The fact that no Republican candidate has made any strong efforts to woo the community may have worked in Obama's favour until now. So far all Republicans have been mostly focusing on the party's traditional constituencies: social conservatives, evangelical Christians and libertarians. "Romney has only viewed the community in financial terms," said Ahluwalia.

Dems Have Brains

Another reason for the poor showing by Republican candidates, said Ahluwalia, is Romney and other Republicans have historically failed to tap the "intellectual capital" of the community. Democrats have done a better job of that in recent years.

Several Indian Americans are currently serving or have served in the administration, including Rajiv Shah, the administrator of the US Agency for International Development, Aneesh Chopra, the chief technology officer of the United States, and Neal Katyal, the former acting solicitor general of the United States.

Neera Tanden, the president of the Center for American Progress, served as domestic policy director for the Obama campaign. Hillary Clinton, the secretary of state and former first lady who unsuccessfully challenged Obama for the Democratic nomination in 2008, also had several Indian Americans in her inner circle and campaign. Tanden was a policy director for Clinton's campaign before joining Obama.

 2011: Walking Into the Sunset, Wobbly

(This column was first published by the International Business Times.) By Frank Islam

The global economy cannot afford to have another unsteady year like 2011.

Perhaps the most apt adjective to describe the state of the global economy in 2011 would be "unsteady." With crisis after crisis casting giant shadows over nearly all major economies, last year, most of the world was more concerned about not falling into another recession than boosting growth.
Those crises included a disconcerting impasse over raising debt ceiling in the United States that nearly led to the first‐ever federal government default ‐‐which subsequently resulted in Standard & Poor's downgrading the country's sovereign credit rating ‐‐and a credit crisis in the euro zone that is threatening the very euro project.

Staying too long in a crisis‐aversion mode by countries, big and small, meant the world today is no closer to finding solutions to the cascade of economic problems that began in 2007, with the subprime lending crisis in the United States.
According to the U.S. Department of Commerce's Bureau of Economic Analysis, the country's real gross domestic product growth in the first, second and third quarters of 2011 were 0.4 percent, 1.3 percent and 1.8 percent respectively. In 2010, during the corresponding quarters, the GDP had grown 3.9 percent, 3.8 percent and 2.5 percent.

The unemployment rate remains high, even though the jobless claim announced Dec. 15 was the lowest since 2008.

In America, the engine of global growth for much of the past and current century, the Great Recession is still in the rearview mirror. There are more poor people in the country today than at any point in history. The latest census figures reveal that nearly 50 million Americans, or, 1 in 6, are poor. That's more than the population of Spain.

Yet, compared to Europe, the United States ends 2011 in a relatively better position.

In the third quarter of 2011, GDP increased by only 0.2 percent in the euro area known as EA17, while in the larger EA27 countries, it increased only 0.3 percent, data compiled by Eurostat, the European Union's statistical office, show. The second quarter growth rates for both zones were 0.2 percent.

What prevented the EU GDP from being in the negative zone was the growth rate in Germany, which accounts for 30 percent of the Eurozone economy.

The region was already hurt by recessive spiral from the fringe countries in the light of austerity measure that were forced upon them. Economic slowdown was visible even in core countries. Recession seems unavoidable in the region now, but how deep and how much time it will take to come out of it depends on the extent of crisis the region is facing.

Much of the year, a number of European economies were under the threat of a collapse. The problem was more severe in Greece, where the crisis resulted in political and social upheavals. The sovereign debt crisis claimed two national leaders in November, when within a span of five days two prime ministers, George Papandreou of Greece and Silvio Berlusconi of Italy, were forced to resign. The BRIC countries ‐‐Brazil, Russia, India and China ‐‐which, along with Japan, form the third dominant pillar of the world economy,were beset by problems in 2011. Inflationary pressures and the effect of Europe credit crisis seemed to have affected many of these countries, as well.

China, the world's second largest economy, whose strong growth has had a positive effect on the global GDP in the past few years, too, witnessed a slowdown in growth in 2011. Having started off with a 9.7 percent growth in the first quarter, the growth slowed to 9.5 percent in the second quarter and 9.1 percent in third quarter.

India, another economy that has posted steady growth over the years, had many setbacks in 2011. In 2010, the Indian economy had grown by 8.5 percent. This year, the growth rate of 6.9 percent during the July‐September months was its smallest in nine quarters.

Impacted by a weak global economy, high interest rates and runaway inflation, New Delhi revised its growth projections time and again. From an initial 9 percent growth projection,it scaled down to 8.5 percent, then to 8 percent and now to 7.5 percent.

Rating agencies such as CRISIL and Fitch have also cut their forecast on India to 7 percent from 9. The Federation of Indian Chamber of Commerce and Industry (FICCI) was even less optimistic, forecasting a growth of 6.6 percent to 6.8 percent, with more downside risk. The chamber blamed poor performance from the manufacturing segment. In October, the country's industrial production contracted by 5.1 percent.

Brazil, whose economy witnessed a growth rate of 7.5 percent in 2010, driven by commodities boom, growing middle class and mineral wealth, may now see a growth of only 3 percent to 3.5 percent 2011.

Russia's GDP growth is likely to be a little over 4 percent. But as the Organization for Economic Cooperation and Development (OECD) pointed out, the country is constrained by poor business environment and energy inefficiency.

In many countries, what exacerbated the problem was a lack of consensus among the political classes and a lack of political will among the leaderships to address the problems.

In the United States, S&P's decision to downgrade the country's credit rating was prompted by an inability on the part of its leaders to reach a consensus. The deep division between the executive and legislative branch was again on display toward the end of the year, when the House of Representatives initially refused go along with the White House and the Senate in extending the unemployment benefits.

In Europe, there was an inordinate delay on the part of its leaders to arrive at a consensus on bailing out countries under imminent threat of a collapse. Even the final decision was taken without Britain, a major economy, on board.

In the new year, one hopes world leaders will show more unity and act more decisively in tackling global economic problems. The global economy cannot afford to have another unsteady year. (Global India Newswire)
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(Frank Islam is the co‐author of the book Renewing the American Dream: A Citizens Guide. He is also a member of the advisory committee of the US Export‐Import Bank and the Department of Commerce Industry Trade Advisory Committee.)

In Good We Trust

In God we trust. So proclaimed the United States House in November when it overwhelmingly passed a resolution to reaffirm that statement as the official motto of the United States.

Congressman J. Randy Forbes, (R, VA), the resolution's sponsor, said the measure was needed because of a "disturbing trend" of ignorance regarding the motto and to "firmly declare our trust in God" as the nation faces "challenging times." This is another example of misplaced Congressional priorities and focus.

Our country is indeed experiencing a "disturbing trend." And, many of our citizens are confronting incredibly "challenging times." The trend and times, however, are characterized by a dramatic rise in social and economic inequality and not by a lack of belief or commitment to the Almighty. 

That is why instead of talking about God our legislators should be consumed with doing all that is required to address these conditions and their root causes. Specifically, they should be engaged in a thoughtful dialogue about the common good, what should be a public good and then compromising and collaborating to solve our problems.

We are at a pivot point. To save the United States as we have known it, we need to put things in the proper balance and perspective. We need to reaffirm our trust in good as well as God.

The concept of "goodness" has been at the center of philosophical and political discussions dating back to the times of Plato and Aristotle. This is not the case in the United States today, however. Reason and rational discourse have been replaced by rancorous rhetoric. 

At the end of the constitutional convention, a woman asked Ben Franklin what type of government the constitution was bringing into existence. Franklin responded, "A republic -- if you can keep it." Given our downward spiral, we are in danger of losing that republic and becoming a virtual theocracy controlled by an activist minority group of the rich, powerful and special interests who will dictate the agenda for the majority and the nation.
In his new book, The Price of Civilization: Reawakening American Virtue and Prosperity, economist Jeffrey Sachs describes our current situation as follows, "Our society has turned harsh, with the elites on Wall Street, in Big Oil, and in Washington among the most irresponsible and selfish of all."
George Packer, staff writer for the New Yorker, in his essay "The Broken Contract: Inequality and American Decline," in the November/December 2011 issue of Foreign Affairs magazine, concurs with Sachs and declares, "The more wealth accumulates in a few hands at the top, the more influence and favor the well connected rich acquire, which makes it easier for them and their political allies to cast off restraint without paying a social price."

These are not descriptions of a vibrant and vital representative democracy. They are depictions of an eroding value system and a country which favors the rich over the poor, the few over the many, and the business contract over the social contract. They are warning signs. We ignore them at our peril. 

What should we do? As we stated in our book, Renewing the American Dream: A Citizen's Guide for Restoring Our Competitive Advantage, we should begin by putting our trust in American citizens to do the right and good thing. 

These citizens come in all shapes, sizes and creeds. The good news is that we are already witnessing evidence of "an American spring" -- citizens pushing back from across the spectrum to make America, America again. 

We see business leaders like Warren Buffet willing to pay his fair share of taxes and Howard Schultz demonstrating personal concern by raising dollars to be used for job creation. We see political leaders like the Gang of Six setting aside ideological blinders to advance solutions in the best interest of the country. We see start-up groups like No Labels trying to bring us together rather than to tear us apart. We see individuals, as 21st century citizens, doing their own homework, reasoning independently, and then taking positive actions to make to our country a "more perfect union."
This gives us faith and hope. While in God we trust may be our motto, in good we trust must be our motive. As long as "we the people" make choices based upon a motive and not just a motto this democracy will endure. 

It will endure because we have both a spiritual and moral compass. It will endure because we have both a heart and a soul. It will endure because both God and Good will bless America.

Frank F. Islam Endows two Mathematics Scholarship Funds

Frank F. Islam, man now living the American dream, is striving to help others follow suit. University of Colorado alumnus Frank F. Islam has endowed two scholarships for CU mathematics students. Born in India, Islam immigrated to the United States at 15. He earned bachelor’s and master’s degrees in computer science from the University of Colorado.  After working extensively in the federal government, he founded QSS group, an information-technology company, one of his many successful ventures.  “I am proud to be an alumnus of this university,” Islam told an audience during this year’s CU Conference on World Affairs. “This university is a true treasure. I admire the splendid beauty of this university. I care deeply and love this institution. My days at the University of Colorado were the best part of my life. This university gave me strength and courage and has taught me the dignity of hard work.”

Though he has lived the American dream, Islam believes that dream is in peril. He and co-authors George Muoz and Ed Crego make that case—and offer suggestions on how to reverse the trend—in a recently published book called “Renewing the American Dream.”  Islam now serves as CEO of FI Investment Group LLC, which focuses on providing growth capital to emerging companies and manages specialized and branded funds.  Islam and his co-authors define the American dream as the opportunity of citizens to realize their potential and to succeed, which includes “getting educated and working hard in order to have a good job that pays decent wages, provides adequate benefits, puts food on the table and a roof over one’s head, and allows for retirement with dignity.”

Islam is supporting the critical realm of education with both words and action. He recently endowed two scholarships—the Frank F. Islam Mathematics Scholarship Endowment Fund in Honor of William B. Jones and the Frank F. Islam Mathematics Scholarship Fund in Memory of Wolfgang J. Thron.  Jones is a professor emeritus of mathematics at CU, and he made a particular impression on Islam as a student. Jones now lives in Boulder with his wife, Martha. He remains active in the mathematics department, writing, editing and printing its newsletter. Jones is also described as a “passionate fund-raiser” for the department.  Thron was a CU professor of mathematics who passed away in 2001. He was a member of the Religious Society of Friends and the American Mathematical Society. Professor Thron earned a professional award from the Royal Norwegian Society of Science and Letters and also won the University Medal from the CU Board of Regents in 1985.

During the Conference on World Affairs, Islam paused to recognize Thron: “I admired him and respected him. He was kind, generous, and gracious. He helped me by providing me an opportunity to come to America. The spirit of this extraordinary man deeply touched me. 

These two individuals were the instrument of my successful life journey and the core belief that we must continue the giving in any way we can,” Islam said recently. “I know they will be very happy to see the impact these scholarships will have on the lives of students. I hope these scholarships will allow students in the Mathematics Department to pursue their dreams, choose a career and make their marks on the world.”  As Islam emphasized, “When I give money for a scholarship program, I strongly believe I am investing in the future.  I had a great experience at CU, and I hope these scholarships will help the next generations of students to have the same great experience,” he said, adding, “I want to inspire others to have passion for philanthropy.”  To learn more about “Renewing the American Dream,” see www.renewingtheamericandream.net. Frank Islam’s site is www.ffislam.com.

You Can't Get There From Here

You can't turn left on a light -- or an issue. You can turn right -- from either side of the aisle, at any time. You can make a U-turn anywhere you want -- that's what's called Washington logic and consistency. It can be applied by the administration, the members of Congress, and the esteemed justices of the Supreme Court with equal acuity.

Washington, D.C. may have more roundabouts than any other city in the United States. And if you miss your cross street off the roundabout, you just keep going around and around and around and getting nowhere -- this is similar to the holding of endless congressional hearings and the drafting of meaningless legislation doomed to failure.

This all reminds us of an old joke that goes something like this: A traveler on a country road comes to a creek where the bridge has been swept away by a recent flood. The traveler sees an old farmer standing next to where the bridge used to be and asks, "Is there a way to back track and find some where else to get across the creek?"

The farmer responds, "Yep. Just, go back two miles turn right and... No, go back one mile and turn left..." The farmer stops for a minute, shrugs his shoulders, scratches his head, and then says to the traveler, "Come to think of it, you can't get there from here."

Welcome to Washington, D.C.! A city where there are few bridges being built today (not even to nowhere) and few bridge builders.

It might be argued that the recent passage of the veteran's "jobs" bill with unanimous bi-partisan support in both the Senate and House is a sign that repair work has begun. In fact, just the opposite is true. This "carve out" for veterans from the President's substantial jobs proposal was a no-brainer.

Voting against this bill would have been like voting against motherhood and apple pie. Voting for it was not a profile in courage but of political expediency. It gave the appearance of doing something when in fact it did very little to address the underlying problems of the American economy. The truth is that this vote was one of avoidance rather than commitment.

The President's American Jobs Act was a comprehensive package that included a number of provisions that had previously been endorsed and supported by Republicans. Rejecting it too was a no-brainer. All it required was for partisan politics to prevail rather than reasoned discussion leading to joint problem-solving and compromise.

Unfortunately, compromise has become a dirty word in Washington. Compromise was on the wane in our nation's Capitol before the elections of 2010. It has become virtually non-existent since.

This is sad, even tragic, given that this nation's constitution was a product of compromise. Those newly elected officials who came to Washington D.C. with a professed admiration and belief in the constitution and what it represents do not seem to comprehend or choose to ignore this fact.
The constitution was not handed down from on high. It was hammered out in the halls and backrooms in Philadelphia by founding fathers who frequently didn't agree with one another but saw the necessity for coming together.

This willingness to compromise in order "to form a more perfect union" is best illustrated by Benjamin Franklin.

On September 17, 1787, when the constitution was read aloud for the first time Franklin wrote these words:

We are living in the age of no compromise and in an era in which domination or subjugation of a political opponent triumphs over the interests of "We the People." There are few elected officials, if any, with Franklin's stature, intellect and accomplishments
Infallibility rules and "my way or the highway" is the mantra. This will not change during the 112th Congress for a variety of reasons - most of them political, personal, and no-brainers.

It can change, however, when the citizens express their will in the elections of 2012. While, "we can't get there from here" today, maybe "we will be able to get there from there" after that.

If we can, America will be restored and renewed by a group of elected officials who are willing to compromise in the best interests of the country and its citizens. If we cannot, we will not be able to get there from there - and the democracy and our country will be much worse off because of it.

India and the US have agreed to strengthen their existing partnership in areas, such as science and engineering, social sciences and humanities

Led by US Secretary of State Hillary Clinton and India Minister of Human Resources and Development Kapil Sibal, a group of high-level government officials, educators and college administrators from the United States and India brainstormed here On October 13 about taking their educational relations to the next level.

The first ever “US-India higher education summit,” held at one of Washington’s best-known academic institutions, Georgetown University, did not grab as much headlines as some other bilateral events have in recent times. But that does not diminish the historic nature of the dialogue, and the immense potential the collaboration in the field has for both countries.

The lack of buzz around the summit was hardly surprising. While high-profile presidential and prime ministerial visits and accords, such as the US-India civil nuclear deal, get the credit for advancing ties, one of the best-kept secrets in the bilateral relations is the centrality of the role educational exchanges — especially those from India to here — played in bringing the two nations closer.

At the moment, a 100,000 Indian students are enrolled at US universities. Over the years, American schools have graduated more than a million Indians, many of whom made the US their home, making huge contributions to this country’s economy and acting as unofficial ambassadors of India here.

It is also hard to find a US educational institution which doesn’t have a sizable number of Indians among its faculty, teaching and mentoring America’s young generation.

That is why it is not too far-fetched to say that the Indian alumni of US educational institutions are responsible for initiating large-scale people-to-people relations between the two nations. Before they started arriving on these shores in significant numbers in the 1960s and ’70s, Americans had scant interaction with Indians.

From the US perspective, its schools have trained generations of Indian political and business leaders. Several stalwarts of the current Indian cabinet are graduates of American universities.

Sibal, who also holds communication and information technology portfolio, graduated from Harvard Law School, while Home Ministry P. Chidambaram, is a graduate of Harvard Business School. External Affairs Minister S.M. Krishna counts two American schools as his alma maters, Southern Methodist University and George Washington University. Minister of Rural Development Jairam Ramesh and Minister of Railways Dinesh Trivedi are also American-educated.

But as several participants of the education summit pointed out, the US-India educational collaboration is about the future. It has the potential to transform India, the US and the world, by educating and empowering the Indian youth in unimaginable numbers.

As Sibal said, more than a hundred million young Indians are expected to join the labour force in this decade and, this extraordinary demographic dividend can be leveraged only if this workforce is provided with quality education and taught the relevant skills to remain competitive in the global economy.

To achieve that goal, India is planning to double its gross college enrolment rate to 30 per cent in the next 10 years. That would mean sending an additional 30 million kids to college, which would require, according to the minister, 1,000 more universities and 50,000 more colleges, not to mention more than a million faculty members.

This is where the US comes into the picture. Until now America’s biggest role in transforming the Indian education — other than the help it provided in founding elite Indian schools such as Indian Institute of Technology Kanpur and Indian Institute of Management, Ahmedabad — was attracting Indian students here.

But what India now needs is help with setting up more quality institutions such as these two. And the US, the undisputed leader in the field of higher education, has the wherewithal to help India on this.

America’s 4,200 odd centres of higher learning are the reason the country continues to be the pre-eminent political, economic and military power in the world. It is not just the Harvards, the Stanfords and the MITs that produce world-class research and cutting-edge innovations, hundreds of state schools across the country are equally responsible for pioneering work in many fields.

On October 13, the two sides agreed to strengthen their existing partnership in several areas, such as science and engineering, social sciences and humanities, forge partnership in “vocational education” and “skills enhancement,” and explore new models for education, among other things. Individual Indian and US institutions have also agreed to set up specific projects and initiatives.

Already, several US schools have a limited presence in India through collaborations with Indian institutions. Once the “foreign universities bill,” which is before the Parliament is passed, international educational institutions can set up campuses in the country.
One hopes the legislation will be a reality before the next summit is held in New Delhi.
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Frank Islam is the co-author of the book Renewing the American Dream: A Citizens Guide.

Rise and fall of Raj and Rajat

By Frank Islam| International Business Times November 2, 2011

WASHINGTON, DC: A high-profile insider trading case, which has already resulted in the fall of one of the richest South Asian Americans, is threatening to bring down an iconic figure within the community.

Then they both would become the targets of the most expansive investigation the US government has ever launched. Last month, Rajaratnam was sentenced to 11 years in prison. And within two weeks, Gupta, who had successfully fought off a civil case last summer, would be charged criminally for insider trading.

The facts of the Gupta case are simple.

The prosecution alleges that Gupta provided inside information about two companies on whose boards he served — Goldman Sachs and Procter and Gamble — to Rajaratnam, who traded on the tips and made millions.

Gupta disputes that the communication between the two amounted to sharing inside information. He also claims that he did not materially benefit from any of the so-called tips he provided to Rajaratnam. On the other hand, his defense points out that Gupta has suffered huge financial losses in his dealings with Rajaratnam.

Those who know Gupta vouch for his personal integrity and decency. However, there is no denying the fact that the prosecution has a somewhat strong case against the former McKinsey chief. Insider information cases almost always result in convictions or plea bargains. The prosecution doesn’t usually bring charges unless it is quite certain that it has a strong case.

And in this case, the circumstantial evidence appears to be strong. The indictment says Gupta telephoned Rajaratnam, with whom he had a business relationship, immediately after a Goldman board meeting that approved a $5 billion investment by Warren Buffet. Immediately after the call, Rajaratnam purchased Goldman stocks, which he sold the next day cashing in close to $900,000.

The fact that it has already secured a conviction against Rajaratnam is going to make the Gupta defense team’s task very difficult. Although it is hard to speculate the precise nature of the evidence that will presented if the case goes to trial, it is clear from the indictment that some of the materials the government used against Rajaratnam will be used against Gupta as well.

As intriguing as the facts of the case are some of the elements surrounding it. That both Rajaratnam and Gupta are South Asian American elites and that several of their associates who have been convicted are also from the community have not gone unnoticed in the media, though it is not particularly relevant from a legal standpoint.

Their friendship, which the prosecution is certain to play up during the trial, is another absorbing aspect of the case. So far each man has refused to cooperate with the government against the other even though each could have strengthened his own legal standing by doing so.
Back in March, when Gupta was charged in a civil case by the Securities and Exchange Commission, he had a chance to settle the case. That would have amounted to him giving evidence against Rajaratnam in the latter’s trial.

In a recent Newsweek story, Rajaratnam indicated that he had refused to help the FBI gather evidence against Gupta, whom he referred to as a “first-class guy.”

But loyalty, or greed — which is what insider trading is all about — is not what defines the case, in the world of Rajaratnam.
In the same Newsweek story, by well-known writer Suketu Mehta, Rajaratnam attributes his downfall to the seduction and betrayal by “people from India.” Among the many government witnesses who testified against him were his former Indian American colleagues.

Such reasoning, no doubt, masks his own culpability. Rajaratnam was undone by his greed and penchant for not adhering to the rules — he had “knack for gaming the system,” as Forbes described in a profile. In the case of Gupta, it maybe his carelessness — at best — or greed and refusal to play by the rules, at worst. (Global India Newswire)
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(The writer is the co-author of the book Renewing the American Dream: A Citizens Guide. He is also a member of the advisory committee of the US Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee. He can be reached at his website www.frankislam.com)

Occupiers or Liberators?

By Frank Islam. Huffington post: November 4, 2011

When the United States military invaded Iraq in 2003, many of that nation's citizens looked at and referred to them as "occupiers". We preferred to see and call ourselves "liberators."

Today a group in the United States that labels itself "occupiers" has taken up temporary residence on Wall Street and major streets in other cities across the country. In our opinion, these so-called occupiers also deserve the appellation "liberators".

Unlike our military, this rag tag army is a motley crew. It is comprised of citizens of all types and stripes including socialists, environmentalists, professional protesters, the recently unemployed, and college graduates who can't find a job. They lack a unity of purpose and a common vision.
In spite of this, they have begun a liberation movement because they have sparked a national dialogue about the current state of the American condition. This movement will not be complete until the silent majority weigh in over the next several months and most importantly in the national elections next November.

George Will wrote a column early this year in which he stated "America is a creedal nation and the creed is ...a recurring source of national introspection, discontent, self-indictment and passionate politics." Will noted that according to the late historian Samuel Huntington's book, American Politics: The Promise of Disharmony (1981) by 1980 America had had four "periods of creedal passion" -- the revolutionary era (1770's), the Jacksonian era (1830's), the Progressive era (1900-1920), and the 1960's.

Will observed that we are now in another period of creedal passion. And, he commented approvingly, "Today, the general conservativism of this center-right country and especially the tea party impulse demand renewed seriousness about the creed's core skepticism about government."
We agree with Will that we are indeed in a creedal period but disagree with him about the center right nature of the nation and the extent to which the tea party represents any one's interests or creed other than their own.

Creedal periods have arcs. The tea party movement anchors the extreme right end of the arc. The occupiers anchor the left end. The ultimate shape of the arc and the results from this creedal period will be determined by those in the middle. The citizens in the center will decide the end of this journey. And, history has shown that they tend to be either center right or center left depending on the nature of the issue and the tenor of the times.
The tea party has been complimented by some for its concentrated focus and desire to work within the system. The occupiers have been criticized for not having an agenda and for working outside of rather than through the system.

Here's an alternative perspective. The tea partiers are "occupiers" who have gained control of the Republican Party. They want to use that control as a minority to dictate absolutes to the majority on issues such as how to resolve the deficit and debt crisis and an increasingly prominent role for religion in government. The occupiers are "first amendment advocates", an eclectic bunch who have begun to call the question on the jobless recovery, income inequality, and the distribution of wealth and power in our country.

The tea party folks want to close down the conversation and limit that which we discuss. The occupiers want to open up the debate and argument and then leave it up to us as citizens to make the decisions on those issues that matter. It may look a whole lot messier but that is the heart of democracy and as Professor Huntington called it in the title of his book, The Promise of Disharmony.

Fortunately, as we move forward in this creedal period, much of the bloom has gone off the tea party rose for the public at large. As professors Robert Putnam and David Campbell noted in an August op-ed for the New York Times, "In April 2010, ...a survey found that 18 percent of Americans had an unfavorable opinion of the [tea party]...14 months later...opponents have more than doubled to 40 percent."

That's not to say that we as citizens aren't becoming more conservative in these economically troubled times. It is to say that we don't want somebody else's solutions.

We want to participate in the dialogue and problem-solving. We will be given that chance over the course of the next year up to and through the elections. The issues are now being fully framed and explored. It's no longer just about smaller government, social conservatism and debt reduction. Other critical topics are being brought front and center.

That's the way it should be in America -- a center nation. Thanks to the "liberating" acts of the "occupiers" the national conversation has been expanded, enriched and enhanced. We as Americans who have seen the progress that has been made because of past occupations -- sometimes peaceful and sometimes violent -- should want it no other way.

India’s Unstoppable March Toward Greatness

By Frank Islam: International Business Times August 19, 2011

Nearly two years after getting out of a painful recession, the US economy continues to stutter along. Though multiple indicators have suggested that the recovery is real-the world's largest economy has registered an average growth rate of 2.8 per cent per quarter over seven quarters-the recovery is yet to be felt on the Main Street, USA.

Middle-class Americans, who bore the brunt of the worst recession since the Great Depression, are still struggling financially. Many are still unemployed, or underemployed.

By any measure or yardstick, the current recovery is a soft rebound, characterized by an anaemic growth rate, a reluctance on the part of consumers and companies to spend, a lack of adequate job creation, and a housing market that has still not bottomed out. Since the official end of the downturn in the summer of 2009, in only one quarter has the growth rate touched 5 per cent. In three quarters, it was 1.8 percent or less, hardly impressive for an economy rebounding from a debilitating downturn.

By all accounts, the soft underbellies of the post-recession US economy are the fragile housing and job markets. A series of new data related to these two fields released in the past few weeks underline that fact.

Late last month, Standard & Poor's revealed that home prices in the country had fallen 4.2 per cent in the first quarter of 2011. Alarmingly, housing prices fell in 18 of the 20 largest metropolitan markets, and in most of these places homes now cost less than they did even during the recession.

The S&P survey came close on the heels of a National Association of Realtors (NAR) study, which found that pending home sales fell sharply in April after two monthly gains, implying a slower-than-expected recovery in the upcoming months.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, dropped 11.6 per cent to 81.9 in April from a downwardly revised 92.6 in March. Poor home sales may be in part due to severe weather conditions in several southern states, which were affected by tornadoes and rising gas prices. But it is clear that the free fall of the housing market has not been reversed.

The housing data is especially important since housing is one of the sectors that have become an obstacle to robust economic growth in America. As has been well-documented, one of the triggers for the Great Recession was the collapse of the housing market. Its stabilization is critical to the rebound, as financial institutions as well as consumers have huge stakes in the sector.

The weak job market is the second area of concern for the US economy. Though its fortunes has considerably improved, many businesses, both big and small, are simply not ready to go on a hiring spree, with the memory of the recession and layoffs still fresh in their mind.

In April, the economy added close to a quarter million jobs, not enough to make a real impact on a job market that shed more than 8 million jobs during the recession.  In April, unemployment increased to 9 per cent, from 8.8 per cent in March. The peak unemployment rate after the recession began in December 2007 was 10.1 per cent, recorded in October 2009.

Inadequate job creation is one of the reasons unemployment remains at unacceptable levels. At the current rate of employment generation, it could be four to years before the unemployment rate returns to the 5-6 per cent range.

Meanwhile, new Labor Department figures revealed that jobless claims also increased at a more-than-expected rate. In the week ended May 21, some 424,000 people filed for unemployment insurance, 10,000 more applications than the previous week.
What all these figures suggest is that the labour market is still struggling to gain momentum despite US Fed officials' recent claim that the economic recovery was proceeding at a moderate pace and that overall conditions in the labour market were gradually improving.

In the minutes of their April 26-27 meeting released a few days ago, the officials said the labour market "continued to improve, albeit gradually," even though "the unemployment rate remains elevated".

On the spending front-a third weak spot in the economy-personal consumption expenditure was soft in April, increasing just 0.4 per cent, following a rise of 0.5 per cent in March and 0.8 per cent in February. Spending, which accounts for about two-thirds of economic activity, was hit by high food and gasoline prices, as well as supply-chain interruptions triggered by the recent tsunami in Japan.

Not surprisingly, subpar shows in several critical areas are not doing consumer confidence any good. The Conference Board's Consumer Confidence Index fell to 60.8 last month, a 5-point fall from April and the lowest in five months. The Conference Board is a business membership and research association.

The next few months are going to be very important for President Obama and his economic team, as they campaign for re-election in November 2012. In all probability, the economy will be the number one poll issue, and their priority will no doubt be to turn the soft rebound into a real bounce.

The administration's tasks are well cut out for them: reversing the housing market's slide, enhancing the pace of job creation and putting money into the wallets of American consumers so that they can spend.

For the US economy to regain its footing, it needs to fire on all cylinders. That requires the stabilization of the housing market, creation of jobs-not in hundreds of thousands, but in millions-and increased spending by American consumers.

(Global India Newswire)

(Frank Islam is the co-author of the book Renewing the American Dream: A Citizens Guide, which was released last summer. He is the Chairman and CEO of FI Investment Group, based in the Washington, DC, area. He is also a member of the advisory committee of the US Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee.)

Source: International Business Times. Thursday, May 5, 2011

At long last, Indians Revolt Against Corruption
By Frank Islam

In the first 63 years of its independence, India’s attitude towards corruption had been two-pronged: while one half of the nation displayed a remarkable level of tolerance for graft, the other was largely apathetic to the issue.

Though front-page story after story had been exposing corruption that pervaded the country’s political system from top to bottom, the electorate’s response has been large yawns. Historically, few governments have been voted out on account of corruption, even though ministers and bureaucrats lost their jobs for all kinds of other reasons.

Perhaps the only time a Union government was punished for corruption was in 1989, when Prime Minister Rajiv Gandhi was voted out of power after getting embroiled in the Bofors scandal. That was perhaps the only national election when corruption was at the front and center. Several high-ranking government officials and businessmen were accused of receiving bribes from the Swedish arms manufacturer, which won a contract to supply its 155 mm howitzer.

Many thought the launch of market reforms in the early 1990s and the end of license raj would reduce corruption. Instead, with the creation of additional wealth and circulation of more money in the economy, what one witnessed was an increase in scale of corruption.
Though the country has grown impressively since the reforms began, the growth would have been even more remarkable had corruption been not a factor.

With the government not doing enough to crack down on graft and the civil society not acting strongly enough to build a movement against it, corruption has had a diabolic effect, especially on those Indians that did not have the wherewithal to move the system in their favor.
Overall, besides remaining an obstacle to creating a fair amount of free enterprise and more growth, corruption has also significantly weakened the country’s institutions.

But, now, all that seems to be changing, and changing utterly.

This past fortnight, Indians of all hues and colors, led by septuagenarian Gandhian Anna Hazare, joined an expansive, nationwide a movement against corruption. Taking a page out Mahatma Gandhi’s playbook, the 72-year-old Maharashtrian went without food for nearly a 100 hours, forcing the government to institute a panel to draft an anti-corruption law.

Hazare is a veteran of many civil society campaigns, best-known among which is a movement that turned his native Ralegan Siddhi into a self-sustained model village.

The broad and intense support for Hazare showed that Indians are serious about fighting corruption this time around. That it came just days after India lifted a world cup cricket trophy in Mumbai also indicated that it’s for real. In the past, a sporting victory of this magnitude, which boosts the nation’s mood, would have pushed such a grave and “uncomfortable” issue to being a side story.

Backing for Hazare’s cause was even more passionate on the internet, where college students, young professionals and even Bollywood actors tweeted to voice support for him and express indignation against corrupt politicians, bureaucrats and businessmen.
So, finally, what forced the Indians to shed the apathy and indifference towards corruption? What was that proverbial final straw?
Indian pundits have been coming up with theory after theory on it these past few days. However, it may be two recent scandals of epic proportion that turned out to be catalysts.

The first one was around last year’s Commonwealth Games, held in Delhi. The event, which may have cost India as much as $13.3 billion, was supposed to be a coming-out party for the country, but it turned out to be a national embarrassment. Just days before the grand opening ceremony, several of the venues were still not ready. It was found that Olympian-scale kickbacks were involved in nearly every aspect of the games-hosting.
Soon India’s biggest-ever corruption scam would unfold. It was revealed that taxpayers may have lost tens of billions of dollars when the telecom ministry gave away 2G spectrums to a few companies at a vastly reduced price. According to one estimate, the country’s exchequer lost as much as $39 billion because of the scandal. To put that amount in context, it is more than twice the size of the neighboring Nepal’s economy and it roughly equals the combined GDP of 10 poorest Indian states.

These two scandals outraged a significant section of the country to act. Instantly, public distrust in the government of Prime Minister Manmohan Singh soared. Though Mr. Singh, the man who kick-started India’s economic reforms, himself has not been accused of graft, the cloud of corruption cases has badly tainted his government.

Aware of the potential dangers of a mass movement, Singh was shrewd to quickly meet Hazare’s demands. One was the formation of a panel that would draft an overarching anti-corruption law. The committee consists of five federal ministers and five members of the civil society, including Hazare.

The reason the vocal middle class, which now forms the backbone of Hazare’s movement, has sprung into action is the growing realization that the bounties of the market reform may not be reaching them because of all-pervasive corruption.
Now all eyes are on the newly formed panel and the law it’s considering.

One likely component of that legislation would be an anti-corruption authority named Lokpal, which was one of Hazare’s main demands. One hopes that the new institution will have enough enforcement power. Unless it works closely with investigative agencies such as the Central Bureau of Investigation, who themselves need to work in more independent environments without interferences from political masters, rooting out corruption will remain a goal. These agencies need to be given the power and resources to prosecute those who give bribes, including businesses, as well as government employees that receive them.

It is important that the current outrage against corruption is used to create a culture where, not just paying bribes, but even offering them is also discouraged. Along with a tough new law, a change in people’s attitude is also necessary in cleansing the society of corruption. (Global India Newswire)
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(Frank Islam, Chairman and CEO of FI Investment Group, is a columnist based in Washington, DC. He is the coauthor of the book Renewing the American Dream: A Citizens Guide, which was released last summer. He is also a member of the advisory committee of the U.S. Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee.)

Since the 1980s, the issue of insider trading has rocked the Wall Street every few years, with a top executive of a company or a reputed individual getting caught while trading with what’s called ‘non-public information.’
 
What usually occurs at the end of these periodic scandals is a loss of public confidence in the financial system and, for the individuals involved, a loss of reputation and occasional jail terms, if found guilty.
 
Now, more than six years after celebrity entrepreneur and media personality Martha Stewart served a five-month jail sentence, arguably the most high profile American to be convicted in an insider trading-related investigation, two separate scandals have shaken this country’s investing community.
 
The first one has already wrecked the careers and sullied the names of a few highly accomplished Americans of South Asian origin. The second one, even though not as egregious on the surface, has attracted headlines because it involved the most famous name in investment, Berkshire Hathaway.
 
The first one began when the U.S. Securities and Exchanges Commission, the agency responsible for overseeing the securities market, probed the Galleon Group, a hedge fund management firm based in New York. Its Colombo-born founder, billionaire Raj Rajaratnam, was arrested in October, 2009, by the FBI, prompting investors to desert Galleon and resulting in its collapse.
 
The SEC accused Rajaratnam and his colleagues of “widespread and repeated insider trading at several hedge funds, including Galleon.” According to the agency, the “inside information concerned market moving events such as quarterly earnings announcements, takeovers, and material contracts” and their “scheme generated over $33 million in illicit profits or losses avoided.”
 
More drama ensued on March 1, when the SEC filed civil charges against former McKinsey managing director Rajat Gupta in a related investigation. The agency said that Gupta had repeatedly shared non-public information about the companies on whose boards he sat – including Goldman Sachs and Proctor & Gamble – with Rajaratnam, in whose company the Indian American had investments.
 
Gupta denied the charges and on March 18, filed a lawsuit against the SEC claiming that, by not bringing the case before a jury, the agency was denying him his rights. Many in the legal community believe that the government initiated ‘administrative proceeding’ against Gupta – where preponderance of evidence is less – because its case against him is relatively weak.
 
Nevertheless, Kolkata-born Gupta was forced to leave the boards of several companies and non-profits. If proven guilty, besides paying a hefty fine, he may not be able to have any public association with the Wall Street.
 
Half a world away, in India, charges against Gupta has bewildered the country’s corporate sector, where he was a rock star. Gupta was one of the first Indian immigrants to make it big in the meritorious world of international management consultancy and many Indians had been closely following his rise in the American corporate hierarchy.
 
While the trial of Rajaratnam was moving toward a denouement, news came from Omaha, Nebraska, a few days ago that a top Berkshire executive has resigned after it was revealed that he had recommended the takeover of Lubrizol days after he invested $10 million in the chemical company.
 
On paper, Berkshire’s $9 billion acquisition of Lubrizol resulted in an approximately $3 million profit for David Sokol.
 
Even though Sokol has not, seemingly, broken any securities law, the conflict of interest in his action was grave. It received all the more scrutiny because it happened in Warren Buffett’s company, and Sokol was one of several Berkshire executives being talked about as a potential successor to the Oracle of Omaha.
 
In the world of investments, the name Berkshire Hathaway Inc. is gold-standard. Under the leadership of Buffett, the company has been consistently earning high returns for its shareholders over the decades, whether it was rain or shine, boom or bust. Since 1964, it has earned a whopping 490,409 per cent in per-share book value. In the past decade, which witnessed two recessions, Berkshire reported a 76 per cent total return.
 
The high ethical standard, preached and practised by Buffett, was also part of Berkshire’s appeal. That is also one of the reasons that the Sokol episode created ripples on both Wall Street and Main Street. “Say it ain’t so, Warren,” the Wall Street Journal’s Jason Zweig articulated the dismay of much of the world.
 
That these insider trading allegations have come at a time when the effects of a recession are still lingering doesn’t do any good for the image of America’s corporate executives. Already, there is a very deeply entrenched perception in the United States and the world over that the country’s financial system is heavily rigged in favour of the rich.
 
The federal bailout of a number of large corporations in recent years, and the fact that some of these companies had paid huge retention bonuses to its top executives while accepting the taxpayers’ money, haven’t resonated well with the general public.
 
Now, there are some free-marketers who say that insider trading should not be illegal. Most notably, the late Milton Friedman of the University of Chicago famously argued that the public will be better served if those with confidential information are allowed to trade in stocks freely. There is also a contention that if insider trading is permitted, it may result in lowering corporate executive salaries, ultimately helping investors.
 
But these academic arguments fail to address the core issue: Insider trading gives unfair competitive advantage to a select few over a majority of investors. An ordinary investor would hate to put his money in the stock market in an investment climate where a few are allowed to buy and trade, based on insider information.
 
Ultimately, investing is all about trust. If ordinary investors feel that the system is gamed by insiders, who don’t play by the rules, the economy will be in real trouble.
 
That is precisely why the message the Galleon and Sokol episodes send to general investors is awful.
 
As the Journal personal finance columnist Zweig wrote, “If even Mr Buffett can fail to appreciate a potential conflict of interest under his very nose, then ordinary investors need to realize just how pervasive and insidious conflicts are throughout the financial world.”
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Frank Islam, Chairman and CEO of FI Investment Group, is a columnist based in Washington, D.C. He is the co-author of the book Renewing the American Dream: A Citizen’s Guide, which was released last summer. He is also a member of the advisory committee of the U.S. Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee (ITAC).

India’s rich should emulate Gates, Buffett

By Frank Islam on International Business Times: March 24, 2011

Two distinguished Americans are in India this week on a noble mission. William Gates, Jr. and Warren Buffett, the second and third richest individuals on the planet and also among its most generous, landed in the country earlier in the week to preach giving to India’s super-rich.
The visits of Buffet, the chairman and CEO of Berkshire Hathaway, and Gates, the Microsoft founder, are part of their “Giving Pledge” campaign, which was launched last year to encourage the world’s wealthiest individuals to donate most of their money to charities. The two have, so far, secured commitments from about 60 wealthy Americans to give away most of their fortunes to charities.

But in India, given the track record of the country’s most affluent class in charity, they will have their task cut out. According to the management consulting firm Bain & Company, philanthropic donations in India account just 0.6 per cent of the country’s gross d@

Ú8@[§Œ. (In the United States, it is nearly four times more.)

As Arpan Sheth, a Mumbai-based partner with Bain, pointed out at the Indian Philanthropy Forum last March, the culture of charity is yet to emerge in India. He cited some basic facts to prove that point. For instance:

* The share of individual and corporate contributions form only a tenth of all philanthropy; In the   United States, they account for a lion’s share, 75 per cent.
* In India, the wealthiest class gives away just 1.6 per cent of household income, less than even the middle class, which donates 1.9 per cent.

Sheth identified many reasons why India’s rich are unwilling to donate money to charities, including a lack of government tax credits, cultural factors and the relative unwillingness on the part of the new rich to give away large chunks of money to philanthropic causes.

However, few societies need philanthropy more than India. A country of unimaginable riches, it has also unthinkable destitution. For starters, India has the largest concentration of poor people in the world. A majority of the population cannot afford good health care or quality education. A third of the country is not literate.
If there is one defining feature of contemporary India, it is inequality. Deprivation coexists with sinful plenty across the length and breadth of the land. Nothing illustrates it better than the fact that the country’s wealthiest 5 per cent controls two-fifths of its wealth.

Undoubtedly, India has the resources to provide a decent quality of life to all its citizens. It always had. The subcontinent has been a land of infinite riches through the ages. It was the fairy-tale opulence of the region that brought invaders, settlers and merchants of all ilk — the Aryans, Alexander, the Arabs, the Mongols, the Mughals and the British—to its shores over the millenniums.

Even though the European colonial rule wrecked its economy and drained much of the resources, when India became an independent nation in the middle of the last century, it still possessed unfathomable bounties.

In the late 1930s probably the richest man in the world was the then Nizam of Hyderabad, Osman Ali Khan, who was worth $2 billion, with a daily income of $5,000, as a 1939 Time magazine noted. The year Time ran its cover story, as a matter of fact, the combined receipts of the U.S. treasury was $6.3 billion. (In today’s dollars, Khan’s 1930s’ net worth would be a quarter of a trillion dollars — two and half times more than what Gates was worth at the height of the information technology boom — which would make the Nizam one of the richest individuals in history.)

Now two decades after India launched market reforms, the country has once again become the land of the supremely affluent individuals.
In the Forbes magazine’s latest list of the world’s billionaires, 55 are Indians. Their combined net worth: close to $250 billion, or nearly 20 per cent of the country’s GDP. India accounts for just a little over 2 per cent of the global GDP, but it is home to 5 per cent of all billionaires in the world.
Those who figured on Forbes’ list include household names such as Lakshmi Mittal ($31.1 billion), Mukesh Ambani ($27 billion), Azim Premji, ($16.8 billion), N.R. Narayana Murthy ($2 billion) and Vijay Mallya ($1.4 billion). They represent a whole gamut of India’s economy, covering nearly all major sectors — information technology, infrastructure, telecom, banking and finance, steel, real estate and healthcare, to name a few.

Such collection of individual wealth should, no doubt, be celebrated, and Indians should embrace the riches of their fellow citizens gained through fair means. The various enterprises these men and women run create tens of millions of jobs in the country, contribute to the well-being of tens of millions of families and make immense contributions to the economy.

But with great riches come great responsibilities, as the two gentlemen currently in India have demonstrated over the years.
Gates and his wife have given more than $24 billion to charities since 1994. Their Bill & Melinda Gates Foundation, one of the largest charitable groups in the world, have made real impacts in the fields of global health and development. In 2006, Buffett committed $30 billion to the Gates Foundation, perhaps the largest ever pledge by an individual.

It is time for India’s billionaires to follow the leads of these two Americans. That Gates may have done more for their country’s poor than most Indians on the Forbes’ list is not a good reflection on them.

However, it is not that every Indian mogul is completely oblivious to the problems of the poor. Some of them are already engaged in admirable work.
Premji, founder and chairman of Wipro Ltd., runs a $2 billion charity. Murthy’s Infosys Foundation supports education and research. Rohini Nilekani, wife of fellow Infosys billionaire Nandan Nilekani, heads an influential education foundation, Akshara. The Bharti Foundation, launched by mobile phone mogul Sunil Bharti Mittal, also promotes education of underprivileged children. Shiv Nadar, founder and chairman of software outsourcing company HCL Technologies Ltd., has pledged to donate for charities a tenth of his estimated $4.2 billion.

But these individual efforts are exceptions, rather than norms.

Living in a society where income disparity is huge, India’s rich need to fulfill their social responsibility — perhaps even more than their counterparts in the west — by working toward improving quality of life of the citizenry as a whole.

The argument here is not to create a socialist system that will dish out goodies perennially, or introduce and sustain a permanent welfare system. Far from it. The emphasis should be on supporting institutions and structures in the country that will give a helping hand to the poor, provide them with the right kind of training and tools and equip them to tackle their own problems and challenges.

India’s billionaires should join hands, as Buffett and Gates have done. Again, one is not saying here that if they sit together and open their thick wallets, all of India’s problem will vanish. But if these entrepreneurs, with their brilliant history of wealth creation, pool their resources and mindshare innovative solutions in areas such as poverty-reduction, public health and education won’t be far behind.

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(Frank Islam, Chairman and CEO of FI Investment Group, is a columnist based in Washington, DC. He is the co-author of the book Renewing the American Dream: A Citizens Guide, which was released last summer. He is also a member of the advisory committee of the U.S. Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee.)

The final figures on India-U.S. trade in merchandise goods for 2010, which was released recently by the U.S. Census Bureau’s Foreign Trade Division, are both encouraging and sobering at the same time.

But, first, the hard, cold statistics: the volume of trade between the world’s richest country and its 11th largest economy was worth $48.8 billion last year; the U.S. exports to India accounted for $19.2 billion and its imports from the country totaled $29.5 billion.

Exports to the United States comprised roughly 14 percent of India’s all exports last year, and its imports from the United States was just under 7 percent of its overall imports. The cumulative value of Indian exports in 2010 was $215 billion and imports $285 billion, the Ministry of Commerce and Industry numbers show.

Major Indian exports to the United States included cut and polished diamonds and jewelry, textiles, pharmaceutical products, mineral fuels and oils, and items India imported included precious stones and metals, machinery, aircraft and spacecraft.

The most encouraging aspect of the new Foreign Trade Division data was that the Indo-U.S. bilateral merchandise trade is growing again. After losing a little bit of momentum in 2009, it increased sharply last year.
Even though the much anticipated $50 billion milestone was missed by a whisker, 2010 turned out to be the best year for bilateral trade in goods. The previous high was $43.4 billion in 2008.

The $48.8 billion in total volume was a 30 percent increase over the previous year, when for the first time in many years the bilateral trade declined mainly because of a nearly $5 billion dip in U.S. imports from India, in the aftermath of the Great Recession. It also represents a more than 8-fold growth over two decades that saw India embrace market reforms and chart a new course for its economy.

Another  good news is that India-U.S. merchandise commerce is more or less a two-way trade, with the balance of trade—which is in favor of India—is a manageable $10.3 billion. It is important for the long-term health of bilateral economic relations that a runaway deficit such as the one the United States is having with China—which ran up a surplus of $257 billion with America last year—is avoided at all cost. It is especially important during tough economic times when protectionist fervor drowns out rational free market thinking.

The sobering aspect of last year’s trade data is that, while the India-U.S. merchandise trade is on the upswing, the two countries have not been able to put it on a fast track. Though India recognizes the importance of the US market, its size and scope for the expansion of exports, it is struggling to meet even the modest goal of increasing its market share to 2 percent.

Trade with India accounted for 1.5 percent of all U.S trade in goods, which totaled $3.2 trillion. In comparison, its Canada trade accounted for 16.5 percent of America’s overall trade in goods, and trade with China 14.3 percent. In November alone, the United States and China traded in goods worth $45 billion, close to a whole year’s worth of India-U.S. trade.

Last year, India was America’s 12th biggest trading partner, sandwiched between the Netherlands at 11th and Singapore at 13th, both much smaller economies. The Dutch gross domestic product is approximately half the size of India’s and Singapore’s less than a sixth.

In recent years, both countries have signaled their intention to increase the bilateral trade volume. Last November, during his historic visit to India, President Barack Obama announced the U.S. goal of doubling its exports to India within the next five years. The president also announced trade deals worth $10 billion, which are expected to create 50,000 jobs in the United States.

India, on its part, knows that trade with the United States will make the country more competitive and innovative, thus strengthening its economy. India also understands that a robust trading relationship with the United States—which imported goods worth more than $1.9 trillion last year—is a realm of endless possibilities.

One can never overestimate the role of U.S. consumers in underwriting the Asian giant’s rapid rise as a global power. Beijing’s surplus in trade with Washington since 2001 is a mindboggling $2 trillion. It is all the more remarkable when considering that, as recently as 1994, the Sino-U.S. trade was $48 billion, which is the volume of Indo-U.S. trade last year.

India realizes, by merely looking at China, that good things can happen when you trade with a rich and reliable partner like the United States.


(Copyrights: Global India Newswire)
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(Frank Islam, Chairman and CEO of FI Investment Group, is a columnist based in Washington, DC. He is the coauthor of the book Renewing the American Dream: A Citizens Guide, which was released last summer. He is also a member of the advisory committee of the U.S. Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee.)

It’s jobs, stupid

28 December 2010

The Great Recession may have ended worldwide, but there seems to be no end in sight for the global labour market downturn that accompanied it, especially in the so-called advanced economies.

 In many countries the job losses and their slow recovery, which are of historic proportion, have the potential to threaten their long-term economic and social stability.

In the United States, the epicenter of the slump, unemployment clawed back to a near-double-digit 9.8 per cent last month, perilously close to October 2009’s peak rate of 10.1 per cent, the highest jobless figures recorded since the current economic woes started in 2007.
In France, the October unemployment rate was an almost identical 9.7 per cent, and in neighbouring Italy it was 8.3 per cent, the highest in seven years. Although Britain, which reported a jobless rate of 7.7 per cent in September, appears comparatively better off, the fact that more than a quarter—27.3 per cent, to be precise—of the country’s workforce now consists of part-time employees is a cause for great concern.

Overall, the unemployment rate in the 27 European Union countries was 9.6 per cent in October, up from 9.4 per cent a year ago. Among the major European economies, Germany is the only nation where the employment figures reached pre-recession levels.
With every passing month, it is becoming more and more evident that what prevents these and other developed countries from making full recoveries are their weak job markets. A case in point is the United States, where only one in nine workers that lost the job so far could find full-time employment. In fact, though the US recession was triggered by a mortgage and housing crisis, it was the implosion of the American job machine that precipitated the downturn.

To get a sense of how bad the job situation in America is, consider the following.  More than 8 million Americans lost their jobs in 2007 and 2008. That is more than the combined population of the UAE and Oman. The number of officially unemployed Americans, which is more than 15 million, is more than the population of all GCC countries except Saudi Arabia. In reality, the US job market is in much worse shape than what the official unemployment statistics indicate. When one brings the underemployed to the mix, at least a quarter of American workers are unemployed or underemployed.

The jobs recovery in advanced economies is so tardy that the International Labour Organisation, a United Nations agency, predicts that employment figures will not reach pre-crisis levels until 2015, revising its last year’s projection that the number of jobs lost would be regained by 2013.

A recent survey in the United States by the National Association for Business Economics, a trade group of business economists, revealed that the present jobs recovery rate in the country is the weakest post-recession jobs gain on record.
From the experiences of the US and other economies, it is unmistakably clear that their road to complete recovery passes through the job market. As long as a significant section of their jobless citizens are not brought back to the workforce, a real economic upturn is out of the question. As the International Labour Organisation pointed out in a recent report, not restoring their jobs have political and social costs as well. It cited finding incidents of social unrest linked to the financial crisis in at least 25 countries, many of them developed nations.
In the United States, we have already seen the political ramifications of the bad job market. In last month’s mid-term elections, it cost President Barack Obama’s Democratic Party the majority in the House of Representatives. America is not the only country, where people’s confidence in government has decreased. In half of the 72 countries the International Labour Organisation surveyed, “people have less confidence in governments now than prior to the crisis.”
In this depressing backdrop, policymakers in the United States and European Union member states, have their work cut out. Implementing policies that will create jobs and prevent the current crisis from becoming a prolonged worldwide employment slump should be their first priority in the New Year.

In recent months, several creative measures have been suggested to counter the employment problem. The International Labour Organisation has proposed strengthening “job-centered policies,” while former British Prime Minister Gordon Brown has called for a US-led global effort, similar to the Marshall Plan, to put the world economy back on track. As a business leader, I would like to see more steps from the governments that will help businesses overcome the current crisis of confidence. In many countries, the primary reason jobs-creation is lagging is companies are reluctant to hire. Despite having $2 trillion on their balance sheet, US firms are holding out on investments because of fear and market uncertainty. Lack of confidence in the market is also the reason British companies are filling their employee needs with part-time workforce. Prolonged jobless situation in the Europe and America is not good news for the rest of the world. What’s happening there will affect other regions and nations, including the GCC, Japan, BRIC countries (Brazil, Russia, India and China), Africa and Latin America.

Some key figures released this week by Eurostat serves as a stark reminder of that reality. According to the EU’s statistical office, total outflow of worker’s remittances fell by 7 per cent in 2009, the first such decline in six years. As for who would be affected by a fall in remittances, it is easy to guess.

Frank Islam, Chairman and CEO of FI Investment Group, is a commentator based in Washington, DC. He is also a member of the advisory committee of the US Export-Import Bank and the Department of Commerce Industry Trade Advisory Committee

"2010 - 2019 will be the decisive decade. The decisions we make and the actions we take in this decade will determine the future of America and the American Dream for all of us", write societal and economic thinkers Frank Islam, George Muñoz, and Ed Crego in their provocative and visionary book Renewing the American Dream: A Citizens Guide. The authors challenge the standard ways of thinking about government, business, the economy, and the role of the nation's citizens, and describe their revolutionary concept of problem solving that envisions America as a shared venture enterprise.

	Frank Islam (photo left), George Muñoz, and Ed Crego present a collaborative vision of a future America where government, business, community based groups, and non-profit organizations work together to renew America and revive the fading American Dream. The authors point out that the decline in the vibrancy of America did not begin with the 2008 economic downturn. They present evidence that the need to re-energize the country began long before that time frame. Indeed, the authors consider the decline to be the result of an enemy from within the United States itself. They view the 2008 - 2009 events as the end result of events that have been unraveling the American Dream over many years. The authors demonstrate that the distortion of the American Dream by Americans themselves, whether in government, business, or the average person on the street, contributed to the current crisis facing the entire country.
	George Muñoz (photo left), Ed Crego, and Frank Islam show the reader an America that has become a nation of deficits. The deficits are not only the well known budget and trade deficits, but also what they call a civic deficit. Cynicism and skepticism have replaced civic responsibility and involvement in the social and political process. The authors point to a debtor nation where business and consumers have become over leveraged with credit obligations. The end result of indebtedness, in a slowing economy, is a reduced middle class and increased levels of impoverished citizens. The authors also see a divided nation, where politics is strongly polarized and discussion of real solutions is lacking. To counter these deficits, the authors provide a workable and effective Renewal Framework that forms a structural foundation for their proposal of what they call Enterprise USA. The proposal is guided by the experience of the authors as businesspeople.
	Ed Crego (photo left), Frank Islam, and George Muñoz maintain that instead of ideology and bickering over policies and programs, the basis of Enterprise USA is a combination of facts, analysis based on hard evidence, and rational decision making. The journey to revitalize the American Dream cannot be just the province of the politicians, lobbyists, and special interests. There must be participation from the citizens, business, community organizations, and the non-profit sector. The civic involvement of the citizenry is a cornerstone of the renewal concept and a firm belief of all of the authors. They make a call to all people to become informed, involved, independent, and interested in the real issues that affect the entire nation. The key to the success of the Enterprise USA initiative is everyone working together toward the common goal of reviving and reinventing the American Dream for the twenty-first century.

On July 22, after a long and grueling contest of wills and words, the Senate approved the extension of unemployment benefits.   As happens too frequently on Capitol Hill, this was a case of time, energy, and talent substantially misspent. 

While the good senators were debating the pros and cons of extension, they continued to dodge and avoid the real issue which is addressing the jobs and economic crisis consuming this country.     What we got was the extension of an unemployment bill that treats the symptoms of the problem when what we needed was a jobs bill that gets at the root causes of the crisis.

The jobs bill should be thought of as an employment benefits bill and an alternative to unemployment benefits.  Unemployment benefits certainly have their place.  They are necessary and their extension during extraordinarily trying times is essential. 

They do not, however, create jobs, nor do they restore the dignity that only a job can provide.  Moreover, unemployment benefits are insufficient to stimulate the increased consumer spending needed for an economic recovery.

Unemployment benefits unintentionally create a sense of dependence and personal helplessness.  Employment benefits, in contrast, promote a sense of independence and self-sufficiency.  Unemployment benefits are static.  Employment benefits are designed to be dynamic.

Given this perspective, its time - past time really - for Congress to pass an innovative jobs bill which creates a program of employment benefits for the millions of Americans who desperately want to get back to work and to make a contribution to turning the economy and America around.  This can be accomplished by engaging in outside the beltway thinking. 

As a starter, here’s one idea for consideration.  Develop a new program that leverages unemployment insurance dollars to create new jobs.  An example of how the program might work is having an employer agree to match or supplement the unemployment benefit payment made to a worker to be hired.  This would do three things:  (1) give the unemployment recipient more dollars to spend and meaningful work to do, (2) give the employer an expanded and enhanced workforce at a lower cost, and (3) address the need to get more money circulating in the economy.

Other ideas:  Create an infrastructure renewal jobs bond program in which individuals and institutions can invest.  Use these investments for targeted job creation to restore our nation’s crumbling infrastructure.  Expand the current payroll tax incentive program and give additional incentives or tax credits to businesses for hiring multiple employees.  Have banks set small business loan targets and put a system in place to reward those that exceed them.

We need fresh ideas because we are in a pivotal period.  The numbers are getting worse rather than better.  And, there are few indicators to suggest any sort of turn-around within the foreseeable future.

The Federal Reserve’s most recent beige book report released on July 28 indicated that economic activity was continuing to improve modestly overall but slowing down in regions of the country.   This is not a good sign – neither for the fledgling economic recovery nor for the American work force.  The worse signs come from the workforce itself.  Or, should we say the “workless force?”

Official government reports place unemployment at around 10 percent (9.5% in June to be precise).  If those who have dropped out of the job-seeking market or who are under-employed are included, this number becomes closer to 20 percent.  Add those working reduced hours or for reduced wages and temporary workers, and the number increases to at least 25 percent.

This sad situation seems to have barely grazed the consciousness of those in power.  As the Center for Economic and Policy Research (The Center) noted in a paper released in July, “Many lawmakers, policymakers, and economic commentators do not appear to recognize the depth of our labor market recession.”  In that same report, The Center projects, “the economy will not return to the December 2007 employment level until March 2014... and will not catch up to the intervening increase in the labor force until early in the next decade.”

This is somber news.  It should be in bold headlines and required reading every day for our elected officials in Washington, D.C.  As should the facts, that over 45 percent of the 14.6 million who are currently officially unemployed have been out of work for 27 weeks or longer and that over 1.4 million Americans have exhausted their 99 weeks of unemployment benefits.

These are stunning statistics but they don’t tell the full cost of joblessness.  Behind each statistic is a human story – a story that tells the true tale of being without work.  The person who loses a job loses part of his or her sense of self worth.  The person who loses a job is knocked down a few rungs on Maslow’s hierarchy.  The person who loses a job loses part of the social network.  The person who loses a job is less able to provide for those he or she supports.

If that person stays jobless for an extended period of time, the psychological and economic consequences can be enormous.  There’s more time to fill with less things to do.  Stress can increase and abuse of self and others is possible.  Self doubt and hatred is possible.  Debt can increase.  A home can be lost.  A marriage can be broken or a family torn apart.

In sum, the continuing jobless recovery has and will have profound economic and social consequences.  We can no longer afford to engage in business or legislating as usual. We need to act now.  We need an act now.  We need to pass a jobs bill that creates a program of employment benefits that puts Americans back to work rather than using them as pawns in a chess game of partisan politics. 

TAKE AMERICA FORWARD:  A CITIZEN’S CALL TO ARMS

by Frank Islam, George Munoz and Ed Crego

Take back America!  That’s the battle cry of the Tea Party movement whose members want to accomplish this by taking the country back to its roots and the halcyon days of yesteryear.  Their agenda centers primarily on limiting the role of government and elevating individual rights that were initially established by our founders for the few.   The tea partiers unfortunately are twentieth century citizens locked in an eighteenth century mindset. 

On one hand, the tea partiers should be commended for their participation and protests.   They should advocate for their perspective.   That’s the American way.
On the other hand, their obsessive focus on the past will not suffice to move America into the future.  It’s like trying to drive a car down the highway only looking in the rear view mirror. 

As various polls have shown,   Tea Party members tend to be Republican, white, male, married and older than 45.  They are a highly vocal and disaffected minority. 

There is a much larger and more diverse group of individuals who constitute today’s “moderate and silent majority.”  Polls show that they too are frustrated by the country’s current condition.   They have yet to be involved in the dialogue and discourse, however. For America to be successful in this century, they must engage.  And, they must do so not as ideologues but as what we refer to as 21st Century Citizens.   

21st Century Citizens understand that their responsibility is to take America forward and not back.  They recognize this requires creating a sustainable competitive advantage that restores the economic and social fabric of the United States. They realize this demands a multifaceted effort and positive engagement on all fronts: individual engagement, organizational engagement, civic engagement, social engagement, and leadership engagement.    

21st Century Citizens are willing to roll up their sleeves, join arms and to work collaboratively and constructively with each other to renew America and the American dream.   They are willing to stand up and speak out as concerned citizens – not as advocates for entrenched positions or as members of political parties or special interest groups.
 
21st Century Citizens understand that the constitution is the starting line and not the finish line.  They are problem-solvers not blame-placers.  They are future-focused and not fault-focused.  They are proactive rather than reactive.

The national mood is one of anger and angst. We are in a pivotal period in the second decade of this new century.  Our choice is to move backward or to move forward – to embrace the future or the past. 

Three decades ago in somewhat similar times Ronald Reagan stated, “I do not believe in a fate that will fall on us no matter what we do.  I believe in a fate that will fall on us if we do nothing.  So, with all of the creative energy at our command, let us begin an era of national renewal.” 

It is time to renew America and the American dream.  It is time for our national renewal.  Renewal requires creating, cooperating and community not regressing, reloading, or “refudiating”.  To us the choice is clear.   We need to join arms as citizens in the 21st century brigade.  We need to take America forward!

Frank Islam, George Munoz and Ed Crego are co-authors of Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage  released on July 4, 2010.  The book provides a systematic assessment of America’s current condition and detailed recommendations for citizen involvement in addressing it.  Islam heads his own investment group and serves on the advisory committee for the Export Import Bank.  Munoz chairs the Munoz Investment Advisory Group and was formerly President of the Overseas Private Investment Corporation. Crego is a management consultant specializing in strategic planning, customer focus and organizational transformation.

Every year on July 4, Americans celebrate Independence Day as a federal holiday. This year we recommend adding Interdependence Day as a new holiday to the federal calendar.   The purpose of this new holiday would be to celebrate the “US” in USA.  The day could be held on either July 3 or 5 in conjunction with the July 4 holiday. 

Interdependence Day would be an appropriate holiday at any time. Establishing Interdependence Day as a national holiday is essential at this point in time because of the current acrimonious climate and the negative tone and tenor of the national debate in the United States.

There is a rising tide of separatist and extremist movements that are forcing Americans into isolated camps turning us against each other – group against group. We ignore this tide at the nation’s and democracy’s peril.  The tide has taken many forms and is manifested in many ways.  Here are just a few examples.

On April 23, Arizona passed a tough immigration later.  Less than a week later, in response to a national uproar, the bill was amended to ease concerns about racial profiling.   At least a dozen states are considering laws similar to Arizona’s and national polls show the majority of the Americans support them. This makes it clear that illegal immigration is a hot button issue.   The need for solving this problem is unquestionable.  Whether state laws are the best way to address it is very much so.

In June, a conservative Catholic group called Fidelis conducted a national survey of 1,000,000 Catholic voters.  In the survey, Fidelis asserted that the Freedom of Choice Act  would “require doctors to even kill live babies who survive a failed abortion and that under the Fairness Doctrine “Catholic radio stations would likely be required to give equal time to atheists, Muslims, Hindus, Satanists, etc.”.  The need to protect religious liberties and Fidelis’ right to do a survey is unquestionable.  Whether this survey is in the best interest of either Catholics or the American religious community is very much so.

This year the National Center for Constitutional Studies will hold over 180 sessions across the country to review the Constitution, and to share its view of the founding fathers perspective and frame the founding of the nation in a religious perspective.   Earl Taylor is President of the Center.  In one of these sessions held in Springfield, Missouri recently, Mr. Taylor reviewed the constitution and all of its amendments.  During his discussion of the amendments he stated that he felt the nation’s leaders could have stopped at ten; claimed that Thomas Jefferson’s slaves wouldn’t have wanted  to be freed because of the way he cared for them;  and opined that women’s suffrage could have been enacted individually by the states.  Mr. Taylor’s right to interpret history and to state his opinion with others is unquestionable.  Whether his interpretation is accurate or done to promote the common good is very much so.

The past few years have been an incredibly divisive period.  We need to confront this divisiveness head on by promoting national unity and a commonality of interest.

Interdependence Day would be a powerful means for accomplishing this. 
It would permit us to recognize the connections that bind us together as citizens of this great country.  America is a nation of immigrants and continues to be so.  Immigrants have and will help make us what we are.  Consequently, the Statue of Liberty should be made central to the holiday.  E pluribus Unum should be its theme.

American holidays are held primarily to recognize past accomplishments and contributions as opposed to celebrating the present and the future.  This holiday should focus backward and forward.   The United States has always been a unique vessel of being and becoming.  This day should acknowledge this by celebrating our diversity, the progress that has been made, and the opportunities and challenges ahead.

Interdependence day is one way of beginning to deal with the red and blue divide by building bridges and a shared community of choice.  That which we celebrate can bind us together.  That which we ignore can tear us apart.

The late John Wooden, the renowned coach of UCLA, said, “Sports do not build character. They reveal it.”  How we resolve our current debate and move forward in the coming years will reveal our American character.  Our expectation is that we will do so, as we have in the past, as an independent and interdependent people striving together to create a more perfect union.  That has been and will be the American way.  And, that’s why we need to establish Interdependence Day as a national holiday.


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Frank Islam, George Munoz and Ed Crego are co-authors of Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage to be released on July 4, 2010.  The book provides a systematic assessment of America’s current condition and detailed recommendations for citizen involvement in addressing it.  Islam heads his own investment group and serves on the advisory committee for the Export Import Bank.  Munoz chairs the Munoz Investment Advisory Group and was formerly President of the Overseas Private Investment Corporation. Crego is a management consultant specializing in strategic planning, customer focus and organizational transformation.

Hone our competitive edge to sustain the American Dream


Published: Saturday, July 31, 2010 at 1:00 a.m.

A recent letter to the editor in the Herald-Tribune raised the question of whether the American Dream is fading or slipping away. The answer to that question is an unequivocal yes. The more important questions are: Why? And, what should be done about it?

Before addressing them, what is the American Dream anyway?

The American Dream is the opportunity each and every citizen has to realize one's personal potential and to achieve success, generally measured as economic security. The fundamental elements of the dream are getting educated and working hard in order to have a good job that pays decent wages, provides adequate benefits, puts food on the table and a roof over one's head, and allows for retirement with dignity.

Given this definition, the dream is definitely at risk. This is because the U.S. is losing the competitive advantage that it has enjoyed for at least the last half a century. The domestic sources of that advantage have included: an ample supply of permanent, good paying jobs; a broad middle class; vibrant small businesses; and a strong manufacturing sector. Our current performance in each of these areas is dismal.

The job situation is significantly worse than regularly reported in the unemployment statistics. Using a combination of metrics, at least 25 percent of American workers are unemployed or underemployed.

The middle class is eroding. In 1970, 40 percent of all Americans lived in middle-income households. By 2006, only 35 percent did. Small businesses that generate around 60 percent of our jobs can't get access to capital. Thus, they can't be the job creation engines they must be to propel a recovery.

The manufacturing sector has shrunk from a robust 20 percent of our gross domestic product to only around 10 percent today. We lost almost 2 million manufacturing jobs in the past two years alone.

The United States is losing its competitive advantage and this is impacting a large number of Americans and the American dream adversely. A new study, released by the Rockefeller Foundation on July 22, reports that "Economic insecurity has increased over the last quarter of a century and is likely to have increased dramatically in the last few years. In 2009, projections suggest, approximately one in five Americans experienced a decline in income of 25 percent or greater."

Classic economic theory is that as GDP goes up, unemployment goes down, and the standard of living goes up. As the new Rockefeller Foundation Report reveals, a rising tide has not raised all boats over the past few decades and it hasn't happened as this great recession apparently draws to a close either. If the recovery has begun and/or it occurs, but the benefits do not flow through to a large segment of the populace, what does it say about the future of America and the American dream?
Our elected officials and business leaders have recognized that the budget deficit and debt threaten our nation's future, and they have established a National Commission for Fiscal Responsibility and Reform to develop proposals to address this critical issue. We need to understand that the disjuncture between "recovery" at the macro level and "renewal" at the micro, or individual, level is a critical one that threatens our nation's future as well. It demands as much, if not more attention, as the budget deficit.

Therefore, I recommend that a National Global Competitiveness Commission be established to develop a 21st Century Competitive Advantage Plan for the United States. The charge to the commission should be to conduct a thorough and in-depth assessment of the United States' current situation. Based upon that analysis, the commission should develop a comprehensive strategic plan for competitive advantage that includes recommendations for creating the necessary and essential bridge between growing GDP and enhancing IEW -- individual economic well-being.

The American dream was built on a promise -- a promise that each of us would be given a level playing field and the chance to do our personal best and to be rewarded or recognized for accomplishing it.

If that opportunity is destroyed, the dream dies and America as we know it dies with it.

Ed Crego is a management consultant based in Sarasota. He is the co-author with Frank Islam and George Munoz of a new book, "Renewing the American Dream: A Citizen's Guide for Restoring Our Competitive Advantage."

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Source: Herald Tirbune

In his first address from the oval office, President Barack Obama described the oil spill as “the worst environmental disaster America has faced” and a “crisis”. 

The oil spill is devastating and indeed it is a major crisis that will have long term consequences for the gulf coast and its residents for years and probably decades to come.

There is another spill, however, that is approaching crisis proportions that could have far greater consequences for the entire United States and for the future of America.  It is the human spill.  The human spill is the un- and under-employed, the under-compensated, and the working poor in the United States.

The oil spill has been and is highly visible. Every day we see tens of thousands of barrels of oil gushing from the Deep Water site, images of tar balls on beaches, and heart-wrenching pictures of sea gulls and other wild-life covered in oil.    

The human spill has been and is primarily invisible.  We get unemployment statistics on a monthly basis and an occasional feature piece but we don’t get ongoing coverage of this crisis on a daily basis.

There are many reasons for this.  A primary one is that, as with the oil spill, the full dimensions of the human spill have been seriously under-estimated.   Just before President Obama’s address, government scientists announced that the Deep Water site could be leaking as many as 60,000 or more barrels a day.  This compares to an original estimate in the 5,000 barrels range.

Official government reports estimate that unemployment in the United States since the first of the year has stood at close to 10 percent.   That statistic significantly understates the dimensions of this crisis. 

If those who have dropped out of the job-seeking market or who are under-employed are included, this number becomes closer to 20 percent or 1 in 5 Americans.  If those employed as temporary workers or working reduced hours or at reduced wages are added into the equation, the number increases to at least 25 percent, or 1 in 4 Americans of working age.  Some estimates are that as many as 1/3 of American families are living in highly distressed conditions.

Unfortunately, as with the calculations of the oil seeping into the gulf, these top-line statistics don’t even begin to tell the whole story of the human toll being wreaked by this crisis.  Almost 7 million Americans have been unemployed for more than 6 months.  1 out of 8 Americans are on food stamps.  Income inequality is at the highest level since it has been measured.  Home foreclosures continue at a record pace.  There has been an unexplained increase in suicides among those in the 45-54 age cohort.

The human spill in the United States is virtually omnipresent.  It affects nearly every area, age cohort, and ethnic group.  Still, the plight of those affected is being largely ignored or tolerated and viewed as acceptable. The question is why is this so?  Although there are many reasons, the one that overshadows all others is that the concerns of those who are part of the human spill are not a top priority for those in positions of political power and influence.    

From the time that he entered office, the four key elements on the President’s domestic agenda have been health care, education, the environment, and energy.  Republicans in the Congress of late have taken to obsessing over the budget deficit and national debt.  So much so, that they want to start balancing the budget on the backs of those long-term unemployed by denying them supplemental benefits. Democrats have shown a stronger inclination to address long-term unemployment issue through extended benefits and a modest emphasis on job creation.  But, in the main, they have been loath to confront the crisis in a major way.  If the polls and pundits are to be believed that’s because it could cost them at the ballot box in the November elections - no profiles in courage there.  Finally, the Federal Reserve Bank still seems infatuated with attempting to right the nation’s financial ship rather than improving its economic ship. 

The sad fact of the matter is that few leaders in government speak or stand for those who are becoming disenfranchised from what once was the American mainstream.  Is it any wonder that a recent Pew Research Center survey disclosed that the three groups in the United States that received less attention than they should from the federal government were:  the middle class, poor people, and small businesses?

We need to correct this attention deficit disorder.  The President could initiate this process through a second oval office address.  In that speech, he could announce that even though he declared war on the oil spill in his earlier address, the real war that we have to win is the war on the human spill. 

The reason for that is simple the human spill engulfs the entire United States and not just a region of the country – by winning that war we win the battle in the gulf as well.  After making that announcement, the President should lay out a specific plan for dealing with this crisis spelling out the steps to be taken to ensure the proper preparation, involvement and execution to prevail in this must-win battle.  

BP drilled in deep water without properly preparing and it appears that it will now pay some of the price for that.  The United States is in deep water and many of our citizens are underwater as a result of it today.  If a plan is not created and implemented with a fierce sense of urgency immediately, we will all pay the price in terms of the future of America and the American Dream.

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Frank Islam, George Munoz and Ed Crego are co-authors of Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage to be released on July 4, 2010.  The book provides a systematic assessment of America’s current condition and detailed recommendations for citizen involvement in addressing it.  Islam heads his own investment group and serves on the advisory committee for the Export Import Bank.  Munoz chairs the Munoz Investment Advisory Group and was formerly President of the Overseas Private Investment Corporation. Crego is a management consultant specializing in strategic planning, customer focus and organizational transformation.

Renewal Matters for America’s Future - Not Recovery

by Frank Islam, George Munoz and Ed Crego

Conventional wisdom is that once the United States achieves full economic recovery we will be out of the woods.  Conventional wisdom is wrong!

For America to succeed in the 21st century, it must move from recession, through recovery to renewal.  Recovery is a means not an end. 

The end must be to renew America by creating a 21st century competitive advantage for the nation and its citizens.  The reason for this is simple. America’s current economy is structurally challenged and the international economic scene for the U.S is significantly more competitive than it was in the 20th century.

Many in the media have not recognized this and are also misreading the tea leaves regarding the state of the recovery itself.  Recent headlines in prominent publications have proclaimed “Don’t look now but the economy’s bouncing back:  Ignore the downbeat commentary.  Recovery is busting out all over”, and “America’s Back!  The Remarkable Tale of Our Economic Turnaround.”    

To turn a phrase from Mark Twain, we believe these reports of America’s recovery have been greatly exaggerated.  Admittedly, there are some green shoots.  GDP is improving.  The market is doing better.  Housing starts and manufacturing indices are up – even restaurants and retailers are reporting slightly better performance than in a dismal 2009. 

But, for every green shoot there are as many weeds.  Unemployment remains excruciatingly high and is projected to stay so at least through the end of the year.  Foreclosure filings jumped in March.  Small business confidence went down in the same month.  Consumer bankruptcy filings look like they will rival the 1.4 million of 2009.

Still, it appears, using traditional measures, that the recession is over and the recovery has begun – even though the contradictory evidence on the recovery suggests that it is a fragile one.  However, that misses the point.

The threshold question remains -  is America doing what is required to renew itself in order to win the race for competitive advantage in the 21st century?  As business people, we believe not.

First, the country doesn’t have a plan and has not prepared to win the race.  Historically, the United States has been a planning averse nation.  Through a combination of factors, including a relatively weak field of international competitors in the past quarter of the 20th century, that aversion worked for us.

Times have changed.  This past decade has been one of relative economic decline for the United States and one of rapid growth for China, India and Brazil.   
This is the new “final four”.  We are still in the leadership position.  The future, though, is promised to no one.   Our position in that final four will be dictated not by our past performance but by our preparation for the future.

Second, America’s status as the “Land of Opportunity” is slipping.  As Isabel Sawhill and Ron Haskins, Senior Fellows at the Brookings Institution noted, “If you are born into a middle-class family in the United States, you have a roughly even chance of moving up or down the ladder.”  They continued to state “If you are born poor, you are likely to stay that way.”

Third, classic economic theory is that as GDP goes up, unemployment goes down, and the standard of living goes up.  That hasn’t happened here so far.  The United States is experiencing a jobless recovery, wage deflation or stagnation and a situation in which income inequality in the country is at its highest level in recorded history. If the recession has ended and the recovery has begun but the benefits do not flow through to a large segment of the populous what does it say about the future of America and the American dream?

Our elected officials and business leaders have recognized that the budget deficit and debt threaten our nation’s future and have established a National Commission for Fiscal Responsibility and Reform to develop proposals to address this critical issue.  We need to understand that the disjuncture between “recovery” at the macro level and “renewal” at the micro or individual level is a critical one that threatens our nation’s future as well.   It demands as much, if not more attention, as the budget deficit.

Therefore, we recommend that a National Global Competitiveness Commission be established to develop a 21st Century Competitive Advantage Plan for the United States.  The Commission should be similar to the 9/11 Commission in the unfettered scope of its reach.  It should be nonpartisan rather than by bipartisan.  It should draw national leaders from all sectors. 

The charge to the Commission should be to conduct a thorough and in-depth assessment of the United State’s current situation and to develop a comprehensive strategic plan for competitive advantage. The plan should be constructed to address the micro factors and to renew America in the areas that matter to average citizens.  It should be reviewed with various stakeholder groups for comment and then presented to the President and Congress for consideration and action.

This past decade has been one of decline for the United States.  This current decade will be the decisive one.  By creating a competitive advantage plan for the country, we will ensure the decisions we make and the actions we take will position the nation and its citizens for success in the 21st century.
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Frank Islam, George Munoz and Ed Crego are co-authors of Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage to be released on July 4, 2010.  The book provides a systematic assessment of America’s current condition and detailed recommendations for citizen involvement in addressing it.  Islam heads his own investment group and serves on the advisory committee for the Export Import Bank.  Munoz chairs the Munoz Investment Advisory Group and was formerly President of the Overseas Private Investment Corporation. Crego is a management consultant specializing in strategic planning, customer focus and organizational transformation

TAKE AMERICA FORWARD:  A CITIZEN’S CALL TO ARMS

by Frank Islam, George Munoz and Ed Crego

Take back America!  That’s the battle cry of the Tea Party movement whose members want to accomplish this by taking the country back to its roots and the halcyon days of yesteryear.  Their agenda centers primarily on limiting the role of government and elevating individual rights that were initially established by our founders for the few.   The tea partiers unfortunately are twentieth century citizens locked in an eighteenth century mindset. 

On one hand,  the tea partiers should be commended for their participation and protests.   They should advocate for their perspective.   That’s the American way.

On the other hand,  their obsessive focus on the past will not suffice to move America into the future.  It’s like trying to drive a car down the highway only looking in the rear view mirror. 

As a recent New York Time/CBS News poll reported, the Tea Party represents only 18 percent of Americans and members tend to be Republican, white, male, married and older than 45.  They are a highly vocal minority.

There is a much larger and more diverse group of individuals who constitute today’s “silent majority.”  They have yet to be involved in the dialogue and discourse. For America to be successful in this century, they must engage.  And, they must do so not as ideologues but as what we refer to as 21st Century Citizens.    

21st Century Citizens understand that their responsibility is to take America forward and not back.  They recognize this requires creating a sustainable competitive advantage that restores the economic and social fabric of the United States. They realize this demands a multifaceted effort and positive engagement on all fronts: individual engagement, organizational engagement, civic engagement, social engagement, and leadership engagement.     

21st Century Citizens are willing to roll up their sleeves and join arms and to work collaboratively and constructively with each other to renew America and the American dream.   They are willing to stand up and speak out as concerned citizens – not as advocates for entrenched positions or as members of political parties or special interest groups.
 
21st Century Citizens understand that the constitution is the starting line and not the finish line.  They are problem-solvers not blame-placers.  They are future-focused and not fault-focused.  They are proactive rather than reactive.

The national mood is one of anger and angst. We are in a pivotal period in the second decade of this new century.  Our choice is to move backward or to move forward – to embrace the future or the past. 

Three decades ago in somewhat similar times Ronald Reagan stated, “I do not believe in a fate that will fall on us no matter what we do.  I believe in a fate that will fall on us if we do nothing.  So, with all of the creative energy at our command, let us begin an era of national renewal.” 

It is time to renew America and the American dream.  It is time for our national renewal.  Renewal requires creating, cooperating and community not regressing, repealing, or reloading.  To us the choice is clear.   We need to join arms as citizens in the 21st century brigade.  We need to take America forward.

_____________________________________________________________

Frank Islam, George Munoz and Ed Crego are co-authors of Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage to be released on July 4, 2010.  The book provides a systematic assessment of America’s current condition and detailed recommendations for citizen involvement in addressing it.  Islam heads his own investment group and serves on the advisory committee for the Export Import Bank.  Munoz chairs the Munoz Investment Advisory Group and was formerly President of the Overseas Private Investment Corporation. Crego is a management consultant specializing in strategic planning, customer focus and organizational transformation.

Dear Editor/Producer,

America has become a deficit nation, a debtor nation, and a divided nation.  Our economic and social fabric is in tatters.  2000-2009 was the decade of decline for the United States and a lost decade for the American worker and the middle class.  The American dream and the “shining city upon the hill” have begun to slip into the shadows.

In spite of this, few realize that the United States is at war on the home front.  The country is threatened by the enemy within -- our inability to grasp the severity of our current situation and to work together to resolve it.  We are at a critical crossroads. This new decade, 2010-2019, will be the decisive one.  The decisions we make and the actions we take in it will determine the future of America and the American dream.

Concerned citizens understand this is a pivotal period.  But, they are scared.  They have lost confidence in their leaders, their institutions and the “governing elite.” They are in search of answers. They are looking for authentic analysis and positive alternatives for involvement.   Now a new book, Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage (Atlas Books, June 2010), takes a hard look at where we are right now, what needs to be done about it, and actions that citizens can take to help defeat the enemy within.

This “future affairs book” is co-authored by Frank Islam, a Muslim Indian American; George Munoz, a Hispanic American; and Ed Crego, an American of mixed European heritage.  As successful entrepreneurs, former senior Presidential appointees, and business leaders, these men have lived the American dream and represent the diversity that is America.

The authors were disappointed as they watched political and business leaders engage in “ritualistic Kabuki theatre within the Washington Beltway and inertia outside of it”.  This vacuum in leadership and citizens’ reactions to it caused them to write this book.

Drawn from their significant and substantial front line experience in leading, managing and working in the private and public sectors, Renewing the American Dream is a “call to arms”.  It brings the citizen's voice and the businessperson's perspective to the forefront in a national dialogue which, to this point, has been dominated by elected officials, lobbyists, talk show hosts, academics, economists, and journalists.

Renewing the American Dream advances a nonpartisan, hands-on, citizen-centered agenda for change.  It frames the dimensions of America's current situation in holistic terms; presents detailed recommendations for renewing the dream; and, outlines actions that leaders, organizations and individuals can take to participate in the renewal process. Renewing the American Dream provides a comprehensive and integrated analysis of the American condition using a unique three part Renewal Framework including: The American Dream Construct, The American Dream Platform, and The American Dream Process.

The Framework is based on the understanding that the response to our nation’s crisis cannot be about grand ideas, ideologies or government policies and programs alone.  It places 21st century citizens who are willing to engage in nonpartisan debate and action at the center of the renewal effort in the following areas:

• Defining a 21st  century competitive advantage for the nation
• Renewing leaders, organizations and individuals
• Redirecting business and government
• Implementing policies and programs that: create jobs, rejuvenate the middle class, reignite the manufacturing sector, unleash the potential of small business and entrepreneurs, ensure a vital news media, and, advance America’s role in the world.

Renewing the American Dream is a touchstone for citizen engagement in the process of restoring the economic and social fabric of the United States.  In an interview, the three authors can discuss:

• Enterprise USA—a shared venture with business, government, community-based and non-profit organizations working together in order to revitalize all aspects of America and the American Dream.
• Why we need to establish a National Global Competitiveness Commission to Develop a 21st Century Competitive Advantage plan for the United States.
• The critical need to take stronger actions to restore jobs and the middle class
• Reforming corporate tax policies and creating strong incentives for America’s manufacturers to establish plants and manufacture products domestically.
• Increasing funding and expanding the current direct and guaranteed loan programs for start-ups and small businesses.
• Having each federal government agency conduct a zero-based strategic organizational assessment and develop a strategic blue print to become a high performing organization.
• Eliminating TV Coverage of Supreme Court  Hearings
• Establishing an independent oversight board to monitor the work of the Federal Reserve Board.
• Preparing future generations of citizens by teaching civics and civic engagement in middle school.
• Establishing a national interdependence day to be celebrated on July 3 or 5
• The characteristics of the 21st century citizen and options for citizen engagement

Frank Islam was the founder of the QSS Group an information technology consulting firm which he sold to Perot Systems in 2007 for $250 M. Frank currently heads his own investment group, hosts his own Washington D.C. talk show, “Washington in Review’, and serves on the advisory committee for the Export Import Bank and the Industry Trade Advisory Committee for the Department of Commerce. 

George Munoz is currently chair of the Munoz Investment Advisory Group.  George was the Assistant Secretary and CFO of the United States Treasury and President and CEO of the Overseas Private Investment Corporation during the Clinton administration.  He serves on a number of corporate boards including Marriott International, Altria Group and the National Geographic Society.

Ed Crego is a management consultant who has led major consulting practices specializing in strategic planning, customer focus, and organizational transformation.  Ed has written several business books and spoken extensively in his areas of expertise for organizations such as the American Management Association and the Conference Board.

For more information about Renewing the American Dream or to arrange an interview, please contact us directly.

Best,
Renewing the American Dream:
A Citizen’s Guide
Tess Woods & Drew Granchelli                                              By Frank Islam, George Munoz, Ed Crego
Tess.Woods@newmancom.com                                              Atlas Books, June 2010
Andrew.Granchelli@newmancom.com                                   Hardcover; $19.95, 978-0-615-34977-0

Renewal Matters for America’s Future - Not Recovery

by Frank Islam, George Munoz and Ed Crego

Conventional wisdom is that once the United States achieves full economic recovery we will be out of the woods.  Conventional wisdom is wrong!

For America to succeed in the 21st century, it must move from recession, through recovery to renewal.  Recovery is a means not an end. 

The end must be to renew American by creating a 21st century competitive advantage for the nation and its citizens.  The reason for this is simple. America’s current economy is structurally challenged and the international economic scene for the U.S is significantly more competitive than it was in the 20th century.

Many in the media have not recognized this and are also misreading the tea leaves regarding the state of the recovery itself.  Recent headlines in prominent publications have proclaimed “Don’t look now but the economy’s bouncing back:  Ignore the downbeat commentary.  Recovery is busting out all over”, and “America’s Back!  The Remarkable Tale of Our Economic Turnaround.”

To turn a phrase from Mark Twain, we believe these reports of America’s recovery have been greatly exaggerated.  Admittedly, there are some green shoots.  GDP is improving.  The market is doing better.  Housing starts and manufacturing indices are up – even restaurants and retailers are reporting slightly better performance than in a dismal 2009. 

But, for every green shoot there are as many weeds.  Unemployment remains excruciatingly high and is projected to stay so at least through the end of the year.  Foreclosure filings jumped in March.  Small business confidence went down in the same month.  Consumer bankruptcy filings look like they will rival the 1.4 million of 2009.

Still, it appears, using traditional measures, that the recession is over and the recovery has begun – even though the contradictory evidence on the recovery suggests that it is a fragile one.  However, that misses the point.

The threshold question remains -  is America doing what is required to renew itself in order to win the race for competitive advantage in the 21st century?  As business people, we believe not.

First, the country doesn’t have a plan and has not prepared to win the race.  Historically, the United States has been a planning averse nation.  Through a combination of factors, including a relatively weak field of international competitors in the past quarter of the 20th century, that aversion worked for us.

Times have changed.  This past decade has been one relative economic decline for the United States and one of rapid growth for China, India and Brazil.   
This is the new “final four”.  We are still in the leadership position.  The future, though, is promised to no one.   Our position in that final four will be dictated not by our past performance but by our preparation for the future.

Second, America’s status as the “Land of Opportunity” is slipping.  As Isabel Sawhill and Ron Haskins, Senior Fellows at the Brookings Institution noted, “If you are born into a middle-class family in the United States, you have a roughly even chance of moving up or down the ladder.”  They continued to state “If you are born poor, you are likely to stay that way.”

Third, classic economic theory is that as GDP goes up, unemployment goes down, and the standard of living goes up.  That hasn’t happened here so far.  The United States is experiencing a jobless recovery, wage deflation or stagnation and a situation in which income inequality in the country is at its highest level in recorded history. If the recession has ended and the recovery has begun but the benefits do not flow through to a large segment of the populous what does it say about the future of America and the American dream?

Our elected officials and business leaders have recognized that the budget deficit and debt threaten our nation’s future and have established a National Commission for Fiscal Responsibility and Reform to develop proposals to address this critical issue.  We need to understand that the disjuncture between “recovery” at the macro level and “renewal” at the micro or individual level is a critical one that threatens our nation’s future as well.   It demands as much, if not more attention, as the budget deficit.

Therefore, we recommend that a National Global Competitiveness Commission be established to develop a 21st Century Competitive Advantage Plan for the United States.  The Commission should be similar to the 9/11 Commission in the unfettered scope of its reach.  It should be nonpartisan rather than by bipartisan.  It should draw national leaders from all sectors. 

The charge to the Commission should be to conduct a thorough and in-depth assessment of the United State’s current situation and to develop a comprehensive and strategic plan for competitive advantage. The plan should be constructed to address the micro factors and to renew America in the areas that matter to average citizens.  It should be reviewed with various stakeholder groups for comment and then presented to the President and Congress for consideration and action.

This past decade has been one of decline for the United States.  This current decade will be the decisive one.  By creating a competitive advantage plan for the country, we will ensure the decisions we make and the actions we take will position the nation and its citizens for success in the 21st century.

________________________________________________________________________________
Frank Islam, George Munoz and Ed Crego are co-authors of Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage to be released on July 4, 2010.  The book provides a systematic assessment of America’s current condition and detailed recommendations for citizen involvement in addressing it.  Islam heads his own investment group and serves on the advisory committee for the Export Import Bank.  Munoz chairs the Munoz Investment Advisory Group and was formerly President of the Overseas Private Investment Corporation. Crego is a management consultant specializing in strategic planning, customer focus and organizational transformation.

Few would disagree that federal contracts set aside for small businesses should go to small businesses — not corporate behemoths.

And yet it seems to happen again and again. Take one recent example: in late December, an IT company named QSS, a subsidiary of Dell Inc., landed a small-business contract for nearly $21 million from the U.S. Coast Guard.

What’s more, QSS — which in 2006 was purchased by Ross Perot’s “Perot Systems” before Perot was gobbled up by Dell last year — is listed in a federal database as a “self-certified small disadvantaged business.”

How can this be? After all, Dell employs some 76,000 people, and the government’s definition of a small business is one that, in this particular industry, employs no more than 1,000.

The answer depends on whom you ask. The most vocal small business activists insist that the government is acting negligently, even nefariously. Regulators in the federal Small Business Administration counter that the issue is mostly the byproduct of coding mistakes and mergers — human errors that the agency purports to be addressing aggressively under the Obama administration.

Whatever the case, the example with QSS — which Hispanic Business Magazine found through a simple search in the federal contracting database FedMine.Us — isn’t an isolated event. [GTPAC note: fedmine.us is a privately-operated, not government-operated web site.]

Other companies that have landed small-business contracts include General Dynamics — the fifth largest defense contractor in the world — Xerox, Office Depot, John Deere and McGraw Hill, according to a 2008 report from the Department of Interior’s Office of Inspector General. As for QSS, in 2008 it was the nation’s 28th largest recipient of small business federal contracts, according to FedMine.Us.

The 2008 report found that large corporations received $5.7 million in awards that should have gone to small businesses. But that was just within the Department of Interior. The total amount of small business contracts getting diverted to large corporations every year is difficult to ascertain, given the inherent murkiness of the issue. Some activists say it is well into the billions.

In October, the government organization in charge of watching over the SBA — that is, the SBA’s Office of Inspector General — said this issue is among the SBA’s most serious problems.

“Audits and other governmental studies have shown widespread misreporting by procuring agencies,” the report said. “Many contract awards recorded as going to small firms have actually been performed by larger companies.”

The issue is drawing more and more attention as politicians, economists and pundits talk about boosting small businesses in an effort to create jobs, reduce the unemployment rate and stimulate the lagging economy.

At least two bills are working their way through Congress to address this issue. One is co-authored by a duo of Senate moderates, Democrat Mary Landrieu of Louisiana and Republican Olympia Snowe of Maine; the other, by the lesser-known Congressman Henry Johnson, a Georgia Democrat.

By law, the federal government must strive to spend 23 percent of its entire purchasing budget for goods and services on small businesses. That’s a lot of money, seeing how the federal government spends more than half a trillion dollars every year. But by the government’s own admission, it hasn’t been meeting that mark.

It claims to come close. The federal government says it hit 21.5 percent in 2008. (The official report for 2009 hasn’t come out.)

But the American Small Business League, perhaps the nation’s most vocal critic on this issue, scoffs at this contention. Chris Gunn, ASBL’s communications director, insists the true amount is somewhere between 5 and 10 percent.

“The numbers speak to a very different reality,” he told Hispanic Business Magazine.

For starters, he said, the government exempts about a fifth of its purchasing budget from the goal, with the explanation that some contracts are too large for small businesses to handle. This alone, Mr. Gunn said, brings the true percentage down to 17.5 percent.

But Mr. Gunn says the bigger problem is that examples like the case of QSS are happening all the time. And those contracts, like QSS’s $20 million job with the U.S. Coast Guard for homeland security, count towards that 23 percent goal, he said.

In October, the ASBL ran a report, and found that eight of the top 10 small business contract awardees in 2008 were large businesses coded “small.” The ASBL further estimates that at least half of the $93 billion the government says is going to small businesses is actually being diverted to large businesses.

Officials with the federal Small Business Administration, which helps regulate federal contracting to small businesses, say the ASBL’s claims are exaggerated.

“We’re not going to stand for any large business that masquerades as a small business and tries to engage in any malfeasance,” Joe Jordan, the SBA’s associate administrator for government contracting, told Hispanic Business Magazine.

The problem, he said, has more to do with human error. For instance, he said, oftentimes a small business working on a small business contract gets consumed by a corporate giant, and the contracting officer forgets to go back into the database and re-code the business as “other than small.”

Also, after 2012, the problem should abate at least somewhat. That’s because, in July of 2007, a law passed forbidding large corporations from keeping the small business contracts of the small companies swallowed up in acquisitions. But the law grandfathered in, for five years, merger deals made prior to that date. This is what happened with QSS group, which, despite what the federal database says, no longer even exists as a company. (It is really just “Dell.”) That company’s five-year contract with the Coast Guard — which has been renewed every year — expires in late May, said Frank Islam, QSS’s founder and former owner, speaking to Hispanic Business Magazine.

Nonetheless, the phenomenon is a widely recognized problem, and reform efforts have thus far failed to catch hold. This owes in no small part to how the reform advocates themselves are divided. In short, the most vocal and visible activists — such as the ASBL — are out of synch with the most powerful and influential lawmakers putting forth their proposed solutions, such as Senators Landrieu and Snowe.

Ms. Landrieu and Ms. Snowe are the chair and ranking member of the Senate Committee on Small Business and Entrepreneurship.

When introducing their Small Business Contracting Improvements Act in February, Ms. Landrieu said it would create at least 163,000 jobs.

“In this past year, small businesses accounted for more than 85 percent of job losses,” she said on the floor. “When large businesses get new work they typically spread the work among existing employees. When small businesses get these contracts they must staff up to meet the increased demand.”

But where ASBL is often knocked for being too extreme, Sen. Landrieu’s effort is being criticized by some for being too mild.

Most notably, although the bill includes strong language about the illegality of large companies landing small-business contracts through misrepresentation, it exempts the Department of Defense, which by many accounts has the worst record on this matter.

“DOD is seriously challenged in its contracting to minority and small enterprises,” David Ferreira, vice president of government affairs for the U.S. Hispanic Chamber of Commerce, told HispanicBusiness Magazine. “They often rely on very large businesses and award them small-business contracts because of loopholes in the law.”

However, Mr. Ferreira said the U.S. Hispanic Chamber is pleased with some aspects of the bill, such as its focus on reducing a phenomenon known as contract bundling. This is when the federal government, for the sake of efficiency, will consolidate several contracts into one super-contract. This often precludes small businesses from competing because they lack the resources for such large jobs.

One particularly unsavory practice related to this is known as “bait and switch” sub-contracting. The term refers to when large corporations, under mandate from the feds, promise to hire, on bundled contracts, sub-contractors that are small businesses or minority-owned, and then renege after winning the job.

It’s a tactic with which Bill Miera, owner of a Hispanic-owned engineering and IT firm in New Mexico with 50 employees, is all too familiar.

For years, Mr. Miera’s Fiore Industries had been winning bids and working on two separate contracts with the U.S. Air Force, worth between $5 million and $10 million a year each.

About 10 years ago, the Air Force bundled one of the contracts into a mega-contract worth around $50 million — far too big for Miera’s firm to handle.

A Fortune 500 company put in for the bid, and in its proposal told the federal government it would be hiring a minority-owned small business — Fiore Industries — as a sub-contractor. (Mr. Miera declined to name the company, citing a reluctance to burn bridges in what is a relatively small industry.)

When the large company got the job, it dropped Fiore Industries and went with another firm, which was Caucasian-owned.

Mr. Miera, a former board member on the U.S. Hispanic Chamber, was forced to lay off five employees. A few years later, it happened again, with another Fortune 500 company, which went even further.

“They started hiring our people to work for them,” he told Hispanic Business Magazine. “They said, ‘If you want to keep your job, you’ve got to work for us.’”

As a result of these two bait-and-switch examples, Fiore Industries’s annual revenues dropped to about $5 million from $8.4 million. It lost about 10 of 50 employees.

Thanks in part to a contract with NASA, Fiore’s revenues have since climbed back to $6.5 million. But the company’s original plan was to be earning $50 million annually by now.

“That hurts, especially when you’ve done good work, and then lose your contract, but not because you’ve done a bad job or your prices are too high,” he told Hispanic Business Magazine.

Mr. Miera said the problem is that the law, as written, has no teeth to punish those who engage in such tactics.

“The large businesses know that,” he said.

For the entirety of the Bush administration, the ASBL, headed up by its colorful leader, Lloyd Chapman — a frequent pundit on cable news networks such as Fox, MSNBC and CNN — carped on the federal government on these issues. It also filed — and won — several lawsuits.

Mr. Chapman claims the Obama administration has been no better.

“I say it’s getting worse, because Obama has refused to close the existing loopholes that all Fortune 500 firms use to get small business contracts,” he told Hispanic Business Magazine.

Mr. Chapman is advocating the federal contracting bill sponsored by Rep. Johnson of Georgia. Mr. Chapman says he helped write the bill, and typically refers to it as his own.

“My bill has 20 co-sponsors,” he told HispanicBusiness Magazine. (They are mostly House Democrats, but the list does include two Republicans: Ralph Hall of Texas and Ileana Ros-Lehtinen of Florida.) “It will solve a 10-year-old contracting scandal, won’t increase the deficit and it’s permanent.”

Mr. Chapman and the ASBL are also highly critical of almost every other advocate on this issue. Senator Landrieu’s bill, they say, while well intentioned, gives recalcitrant corporate giants “a pass.” The U.S. Hispanic Chamber of Commerce is “backed by Fortune 500 companies.” But Mr. Chapman is particularly critical of U.S. Rep. Nydia Velazquez, (D-NY) — chair of the House Small Business Committee, whom he believes has done nothing to address the issue.

“She has chaired the small business committee for three or four years,” he said. “How come she hasn’t proposed legislation to address it?”

He added that Boeing, the world’s largest global aircraft manufacturer, is a major campaign donor to Velazquez and other small business committee members.

“My bill will take $100 million a year in federal small business contracts away from Boeing,” he said.

(Ms. Velazquez’s office did not provide a comment for this story, despite repeated requests from Hispanic Business Magazine.)

For its part, the federal SBA insists that it is working aggressively to fix the problems. By March, of the eight top awardees of small-business contracts that ASBL had highlighted in October, most had been re-coded as “small.”

Also, President Obama has proposed doubling the budget of the SBA, bringing it back to about $1 billion — which is where it was at the start of the Bush administration.

But despite their contention that the problem is most attributable to human error, SBA officials don’t deny that fraud is a factor.

“The U.S. Small Business Administration is making a tremendous effort to combat abuses in the federal contracting program,” SBA spokeswoman Hayley Matz told Hispanic Business Magazine in an email. “SBA recognizes the significant benefits of the program, but also acknowledges that instances of errors and potential abuse have occurred and resulted in negative consequences.”

Source: HispanicBusiness.com. All Rights Reserved – April 8, 2010 – by Rob Kuznia, Staff Writer

Aligarh: Aligarh Muslim University (AMU) today signed a Memorandum of Understanding (MoU) with the George Washington University Law School, USA, which will facilitate faculty members, researchers and Ph.D. students from each other institution to participate for a semester or two as Visiting Scholars for the purpose of conducting research.

The mutual cooperation envisaged individual scholars from both the law institutions to establish contacts and develop mutual interests. The major area of cooperation includes Intellectual Property Law, Islamic Law, Constitutional Law, International and Comparative Law and Environmental Law.

An Interview with Frank Islam

We recently had the pleasure of interviewing TiE-DC Charter Member and Board Member Frank Islam. We found it enlightening and are sure you will to!

1 Now that you sold QSS, what’s next for you?

Right now, I am focusing on leveraging the capital I received from the sale of QSS in the investment world.  Even though the market is volatile right now and the economy is looking a bit dismal, I believe there are some opportunities for a patient investor.  I am taking a long-view on things and have developed some core investment strategies with my team that we have started to implement.  For example, we have established some new funds that are focused on secure debt and on certain specialized asset-backed plays.  I am enjoying this because I can use the business skills I developed through running QSS in evaluating prospective investments and making them stronger. 

2. What are your thoughts on the economy?

It’s tough out there right now.  I was lucky to have exited QSS when I did, but there’s a lot of people out there who are suffering because of tremendous greed on Wall Street, poor governmental oversight and bad judgment by many different groups    I think that it’s going to be tough going for the next couple of years, but there’s no reason to panic because there will also be a lot of new opportunities to invest in or build new enterprises. This is a moment when entrepreneurs can really make a difference by demonstrating confidence in the underlying components of our economy and investing in developing or struggling businesses that continue to show potential in this difficult time. Patience is also necessary to get through this well. 

3. What specific goals, including those related to your occupation, have you established for yourself?

In all things, my main goal is to enjoy what I do while doing things that have a positive impact on society. So, I approach everything from this standpoint.  In business, I chose to build a business that I enjoyed.  I surrounded myself with good people and never let the culture and tone of my company get diluted in the interest of making a few extra dollars or taking shortcuts.  If people enjoy what they do and the people with whom they work – success is much more achievable.  Similarly, when I see things that are not right with the world, I want to fix what I can.  So I am involved in both politics and philanthropy – two major change agents.  Through this, I hope to make a positive impact.   I keep in mind that pursuing happiness is what even our founding fathers’ considered to be the ultimate goal. From a business perspective I always wanted to create a great company where people would be proud to work and that delivered excellent service to its customers. I think I accomplished that with QSS. Now I would like to provide support, both in capital and advice, to emerging companies trying to accomplish the same thing. .  I also want to help people who don’t have the same opportunities that I have.

4. What did it take to attain your goals, and what steps did you take toward attaining them?

The most important thing in achieving your goals is to develop a well thought-out plan and stay focused on executing it.  They say that the whole world steps aside for the man who knows where he is going.  It’s easy to get distracted by the latest buzz, but if you keep a laser focus on what you are trying to accomplish, you will get there.  So, for example, in creating QSS, like everything else, I created a plan and then stuck to it.  I followed common-sense business practices and managed to not get sucked into the flavors of the day, like Dot-Com companies or some of the other technology oriented companies.  When I say common sense, I mean that you need to ask yourself, “what does the customer want”, “how can I deliver it,” “how do I keep them happy” and “what is likely to be their next need.”  Then, you have to budget carefully and plan for as many contingencies as you can.  Same thing goes for other goals, though maybe the questions you ask are a little different and you are budgeting time and energy instead of money. 

PREDICTIONS!

FI Investment Group CEO Frank Islam, who sold QSS last year for $255 million, gave us these tech predictions:

• Outsourcing will be closer to home; corporate governance and social responsibility will become a consideration in choosing outsourcing partners.

• The video game industry will be a bright spot for tech in 2009, with casual gaming companies and "indie" game publishing companies leading the pack.

• Companies will increasingly use distributed R&D models.

• Thin film solar technology will finally be able to produce energy at a cost of $1 per watt by the end of 2010.

Entrepreneur and Investor, Frank F. Islam, Speaks to Macklin Business Institute Students

Published at Nov 20 2008 12:00AM
Category: College/Campus News

QSS Founder; 1105 Gov't

After selling QSS for $250 million last year, Frank Islam tells us he's supposed to be retired, but as we found out earlier this week, he is anything but. He's running FI Investment Group, hosting a television show, and recently signed on as chairman of the State Democracy Foundation, a Bowie-based non-profit portal providing comprehensive voter registration information, online voting tools, and connecting citizens with national and state legislators. But will it connect us with Joe the Plumber?

Frank met State Democracy founder Shukoor Ahmed years ago when Shukoor was running for the Maryland House of Delegates. The two remained friends, and following Frank's "retirement," Shukoor approached him to become the new chair. "With the times we're in, it is imperative that people reach out to their leaders, and we give them the information they need to do so," Frank says, noting the site has increased traffic 400% in the past month.

Here at Frank's Tysons office, State Democracy executive director Ken Laureys tells us he didn't have to think hard about the new chairman: "Frank built a quarter of a billion dollar company, so who better to take our organization to the next level?" Even un-retired, Frank has still managed some travel. He's just back from a European vacation where he traced his wife's Dutch ancestry, finding her parent's original farm and church, which was the same one that Vincent Van Gogh's father once preached at. (Doesn't this story end with Tom Hanks fending off Opus Dei?) Frank also traveled to Barcelona and visited the building where Christopher Columbus met Queen Isabella upon returning from America.

India Post News Service

Living the American Dream Frank Islam
Sunday, 07.13.2008, 10:48pm (GMT-7)

VIRGINIA: Frank Islam is a name synonymous with the American Dream. A native of Aligarh, India, Islam was not exactly born with a silver spoon in his mouth.

But in 1994, when he bought QSS, a support services organization in information technology and aero space engineering, for a "small amount of money", he quickly established a growth of an unbelievable 55,000 percent, which made QSS the largest individual owned company in the United States of America.
After selling his company in Jan 2008, to former Presidential candidate Ross Perot for a whopping $300 million, Islam a proud alumnus of the Aligarh Muslim University, is busy with his new venture, FII Investments and a diagnostic imaging center he bought in Orlando with a 164-slice CT scan. To get an insight into the world of Frank Islam, India Post decided to talk to him in his lavish office in the upscale Tyson's Corner business area in Virginia.

IP: How would you describe yourself?

FI: There's an old proverb: 'I am like a wave; I exist only so long as I continue moving forward.' That sums it up - I am a man who likes to always move myself forward, whether through continuing to educate myself, by impacting the world around me through philanthropy, or as an entrepreneur, trying to push the envelope of achievement. I would describe my approach to any endeavor as one of "cautious pragmatism". It is important to me to choose things that will have an impact.

IP: What specific goals have you established for your occupation and life?

FI: In all things, my main goal is to be happy. I think that if you lose focus on what's really important - happiness - then what's the point? But understand that the pursuit of happiness is not always easy, but a choice that requires effort and, the recognition is not always in an ending, but often in the journey.
Specifically, I'd say that I always wanted to create a great company where people would be proud to work, and if it made money, even better. I also always wanted to help people who didn't have the same opportunities that I have. And I wanted to learn as much as I can about everything.

IP: What does it take to be successful in this career?

FI: I have tried to synthesize what it takes to be successful as an entrepreneur in the technology sector in a guidebook that I am preparing, called the "ICT Executives' Business Guidebook." In that, I talk about what kind of planning you need to do, how to go about marketing, and how to position yourself to customers.
At the core of all of it is just common sense - find the need in the market, develop a solution, and deliver it effectively and efficiently. Ultimately, it comes down to providing value to your customer. And of course, you make mistakes and learn from them. Generally, the same things are necessary to be successful in any career -- effort, perseverance and focus.

IP: How do you evaluate success?

FI: Everyone has a different definition of success. Success to me is achieving the goals I set for myself, enjoying what I do and learning from the experience. It's very much an individual phenomenon. I think the common denominator among successful people, though, is that they think in terms of "I can, I will, I am" as opposed to "would have, could have, should have, and won't."

IP: What's in the offing for the future?

FI: I plan on building the FI Investment Group to become a world class financial investment firm. We will be making direct investments, as well as forming debt, equity and hedge funds with like-minded investors, which will leverage my internally generated cash, as well as my experiences in business.
I plan on giving back to the world through my foundation and a charity as well as participating in many civic and community organizations. Hopefully, through all of these endeavors, I will have an opportunity to continue to learn, enjoy myself and make an impact. And most of all, I plan on having fun and enjoying life with my wife.

India-born entrepreneurs empower US voters

Shukoor Ahmed ran for a seat in the Maryland House of Delegates in 1998, after coming to America a decade earlier from Hyderabad, India. Campaigning door-to-door, he was surprised so many voters did not know who represented them!
After his race ended slightly short of victory, he took advantage of his Master’s degree in Computer Technology and Political Science to build StateDemocracy.org, a website he launched in 2001 to connect citizens and lawmakers. His website’s motto encapsulated its mission:
“Delivering Democracy to Your Desktop!”

Frank Islam similarly came to America to study, earning B.S. and M.S. Degrees in Computer Science. He too became a citizen and eventually founded QSS, Inc., a technology firm he recently sold to Perot Systems for $250 million. He won numerous awards for leadership and established a personal foundation supporting educational, cultural and artistic causes worldwide. (See details at www.ffislam.com).
Last month, Shukoor Ahmed handed over to Frank Islam the gavel as the new Chairman of the StateDemocracy Foundation, the nonprofit operator of the StateDemocracy.org website. Over its seven years, nearly 500,000 people have visited StateDemocracy.org. It remains the only One-Stop portal where Americans living anywhere can connect with all their state and federal lawmakers.

Earlier this year, the Foundation launched another website, LobbyDelegates.com, that enabled rank-and-file Democrats to lobby “Super Delegates” -- the 800 top party officials who held the deciding votes in the very close Presidential primary between Barack Obama and Hillary Clinton. Some 30,000 users lobbied Super Delegates to support their preferred candidate via this one-of-a-kind service, before Obama was finally nominated on August 28.
The StateDemocracy.org portal is now playing a key role in empowering voters to participate in America’s dramatic General Elections on November 4. It offers citizens free online access to: (1) voter registration, (2) absentee ballots and (3) a polling place locator. These tools all work for any jurisdiction in the nation. The site also offers widgets that can be installed on other civic websites for use by their visitors. Even facebook.com offers these tools for its users to add to their own Profile page, to facilitate voting among their visiting friends.
As he takes charge amid America’s historic election, Mr. Islam has embraced the opportunity to give back to his adopted nation by using Internet technology to expand civic engagement. He noted that in October alone, users of StateDemocracy.org doubled compared to the previous nine months, largely due to demand for absentee ballots -- yet another sign of the record-breaking U.S. voter turnout expected this year.
Mr. Islam hopes to use the entrepreneurial skills that brought him so much business success to similarly boost the Foundation to its next level. His goals as Chairman include recruitment to diversify the Board’s expertise, methodical strategic planning, greater grant funding and expanded partnerships with kindred organizations.

Shukoor Ahmed, who will remain on the Foundation’s Board, was recognized last month for the web technology firm he founded, V-Empower, Inc. It was named as the 7th fastest growing technology firm in the Washington, DC area last year. V-Empower builds websites for political candidates and organizations in the U.S., and increasingly in other nations as well.
Not one to forget his homeland, Mr. Ahmed also created a similar website for citizens in India -- IndiaDemocracy.org -- which has attracted nearly 50,000 users since it was launched in December 2002. It remains India’s only civic networking portal, empowering users to contact their lawmakers, as well as share news, photos, videos and blogs about politics in India.

Both of these sons of India can claim to be carrying on the legacy to the wider world of renowned Indian mathematician Aryabhatta, who is credited with inventing the concept of “zero” -- the very foundation for all computer programming. So, it is only fitting that two natives of India, the world’s largest democracy, are dedicated to using the power of technology to strengthen civic participation in the world’s oldest democracy, the United States of America.

The author is the executive director of StateDemocracy Foundation, and can be reached at Ken.Laureys@StateDemocracy.org.

Sify News, November, 2008

For Immediate Release
May 28, 2008

Contact: Georgina Javor
(301) 581-5194
gjavor@strathmore.org

Strathmore Announces Election of
New Board Member

Frank F. Islam joins
Strathmore’s Board of Directors

N. Bethesda, MD:  Strathmore Hall Foundation, Inc., an established arts presenter and cultural destination, announced today the election of two new board members, one of which is a County Executive appointee. 
The Strathmore Board of Directors, and Ike Leggett, the Montgomery County Executive, appointed Potomac resident Frank F. Islam, CEO and Chairman of FI Investment Group.
This respected corporate and civic leader joins the now 29-member board to oversee the management of the affairs, funds and property of Strathmore in fulfillment of its mission.  Strathmore Hall Foundation nurtures art, artists and community through creative and diverse programming of the highest quality.  
Harold K. Roach, Cynthia Wong Hu, Esq. and Deborah Marriott Harrison will retire from the Board at the end of May.

ABOUT THE NEW BOARD MEMBER
Frank F. Islam is CEO and Chairman of FI Investment Group, a holding company that owns healthcare and IT companies.  Previously, Mr. Islam was CEO of QSS Group, an information technology company, which he sold in January 2007 for $250 million.  With a BS and MS degree in Computer Science from the University of Colorado, Mr. Islam has been an active participant in the Information Technology, Aerospace Engineering Services and System Integration business for more than 25 years.  In 1999, he was recognized as the Ernst and Young Maryland Entrepreneur of the Year, and in 2001, the U.S. Small Business Administration selected Mr. Islam as the Minority Small Business Person of the Year for the Washington, D.C. Metropolitan area.

ABOUT STRATHMORE

Strathmore, a 24-year old established arts presenter and cultural destination, nurtures art, artists and community through creative and diverse programming of the highest quality and is home to the Music Center at Strathmore, a 1,976-seat concert hall and education complex.  Strathmore, located at 5301 Tuckerman Lane in North Bethesda, MD, is immediately adjacent to the Grosvenor-Strathmore station on Metro’s Red Line and a half-mile from the Capital Beltway. For more information, call (301) 581-5100 or visit www.strathmore.org.

###

Strathmore is supported by a grant from the Maryland State Arts Council, an agency dedicated to cultivating a vibrant cultural community where the arts thrive.  An agency of the Department of Business & Economic Development, the MSAC provides financial support and technical assistance to non-profit organizations, units of government, colleges and universities for arts activities.

Strathmore is also supported in part by the Arts and Humanities Council of Montgomery County.

Strathmore Hall Foundation, Inc. Board List

Peter Vance Treibley, Chair
Carol A. Trawick, Vice Chair
Jerome W. Breslow, Esq., Secretary
Steven C. Mayer, Treasurer
Paul J. Allen
Joseph F. Beach ex officio
Meagan T. Campion
Richard “Dickie” S. Carter
Starr G. Ezra
Hon. Nancy Floreen ex officio

Nancy Hardwick
Paul L. Hatchett
Frank F. Islam
Alexine C. Jackson
Dianne Kay
James F. Mannarino
Caroline Huang McLaughlin
Alan E. Mowbray
Ken O’Brien
Carrie F. Passmore
Lori Riordan
William “Bill” G. Robertson
Gabe Romero
Dale S. Rosenthal
Mary Kay Shartle-Galotto
Craig A. Snedeker
Wendy J. Susswein ex officio
Annie Simonian Totah

Charles A. Lyons, Chair Emeritus
R. Robert Linowes, Founding Chair

In the beginning of December, TiE-DC Charter Members elected the new TiE-DC Board of Directors for 2008. A record number of Charter Members both ran for and voted in the election. Congratulations to the 2008 TiE-DC Board of Directors, and thank you to all members who ran and voted in the election!

TiE-DC asked the 2008 Board members why they chose to get involved on the TiE-DC Board and what they hoped TiE-DC would accomplish in 2008, and here is what they thought.

Cynthia de Lorenzi: "Among the many reasons I wanted to get involved on the TiE-DC board a couple of the most compelling are TiE-DC’s executive team the quality of the programs and impressive status of the membership. The executive team’s vision and professionalism reflects the caliber of TiE-DC’s membership and their commitment is apparent in how TiE-DC has grown.
It is my hope that in 2008 we will see an increase in membership, especially in the number of women who serve as leaders in our region who discover how great this organization is."

Uli Werner: "I chose to get involved with the TiE-DC board because I believe that you need to get really involved with an organization, otherwise you cannot leverage your membership to the maximum. On a regular basis I chose one organization that I think is worthwhile to get involved and this is TiE-DC, since I believe that the mission, the events as well as the membership have the greatest synergy with my own and that of my company.
I hope that we can continue to offer the same amount and quality of events we offered in 2007 and that the image and reputation of the organization continues to increase to even higher levels in order to attract new members, interesting speakers and good sponsors."

DP Venkatesh: "I felt that being part of a high powered team was a great way to move TiE-DC to the next level. After being on the Board for a year I am very excited to be President Elect and work along with Rakesh to make some waves in 2008.
I am hopeful that we will be able to grow our membership base and attract and retain more high caliber members as we have in prior years and also be able to showcase speakers and industry events of a greater magnitude in 2008."

Frank Islam: "I got involved in TIE-DC board because I can help this organization to get to next level. This is a great organization and we all have to be involved to make it more successful and more innovative.
I  would like to make TiE-DC more visible in the investment community as well as have more networking events."

Satish Jha: "I have been engaged with TiE activities for several years and was on the Board of another chapter a few years ago. I believe its simply a confluence of forces that bring myriad poibilities to converge on to something. Some of the continuing leaders of TiE were kind enough to rope me in and ask me to be more active. I could not do it last year and hope to have a bit more time at hand to support the Board level needs of TiE DC during the year ahead.
I look forward to starting and energizing special interest groups, the Healthcare Roundtable, exploring entrepreneurial possibilities in the field of education and technology and starting The Young Entrepreneur (TYE) forum."

Jinesh Brahmbhatt: "With my 14 years experience at Merrill Lynch, as Vice President in the Private Banking and Investment Group and being a TiE-DC sponsor since its inception, I wanted to use my contacts and resources (as well as those of my partner, Xerxes Mullan) in order to help created more value for the organization.
My goals for TiE-DC in 2008 would involve creating more membership value with events and programs that are out of the box. I would also like to involve more members in the organization."

BLACK TiE!

Haha.  That headline’s a play on words.  See, “TiE” is the illustrious former Indian CIO Council, for those of you who go way, way back to the late 90’s of the last century.  It rebranded and (this could be our imagination) seems to come up at different times with different words that TiE stands for, the most recent being “The Innovative Ecosystem.”  Anyway, we don’t care to overanalyze, we just want to party.  So we went Monday night to the Swiss Embassy “Black-TiE” holiday bash where they not only graduated their TiE-Smith Fellows but also announced their 2008 Board of Directors.  After quadrupling their membership in the past two years, it wasn’t surprising the 150 guest were over capacity for the room.

What’s this?  “FI Investment Group” as the stated affiliation now for our old friend Frank Islam, left?  That’s what happens when you get rich—his cards used to say, “CEO, QSS": until he sold QSS to Perot Systems for $250M earlier this year.  With him, wife Debbie, ubiquitous IMC CEO Sudhakar Shenoy, and Urban Line’s Girish Jindia.  Frank and Debbie are building their dream home -- a little 32k SF cottage in Potomac.  Sudhakar just got back from India where he traveled in style on the Palace on Wheels or what he likened to a land version of a luxury cruise.  Girish just bought a house in South Beach and tells us his oldest daughter is planning a wedding reception at the Omni Shoreham. Sudhakar:  Are you bringing back the Nehru Jacket?

Frank Islam
Founder
QSS Group

In the 06/14/2007 edition of ExecutiveBiz we had a chance to catch up with Frank Islam, Founder of QSS Group.
Earlier this year, Perot Systems acquired QSS Group for $250 million in an all cash transaction. The company had revenues of approximately $260 million, and was founded by Frank Islam. We catch up with Islam on why he sold his company, his future plans, and what were the key to the company’s success.

______________________________________________________________

ExecutiveBiz: What led you to found QSS Group?

Frank Islam: Through my experiences at CSC and Raytheon, I had developed a pretty good understanding of both the delivery and marketing challenges of an IT and Engineering services company, so I felt I was prepared to run a company. I also was excited about the challenge of building a company from the ground up----and although it was a big risk from both a career and financial perspective I was confident I had the energy and focus to build a company and make it successful.

ExecutiveBiz: What were the main areas of focus for QSS Group?

Frank Islam: QSS Group was a 100% Federal government contractor providing both Engineering and IT services. QSS serves both the civilian and defense agencies of the government.

ExecutiveBiz: Earlier this year, you sold the company to Perot Systems Government Services. Why did you choose this time to sell the company?

Frank Islam: There were many factors that went into the decision to sell the company at this time. We had successfully diversified the customer base so that we were not reliant upon any one significant contract or agency. Although we had originally had a number of set-aside contracts, we had also reached the point were most of those contracts had completed and were no longer part of our business base. These two factors helped to make us an attractive acquisition target, as well as our size, which was big enough to have a significant impact on any company that might acquire us, without being so big as to pose an integration challenge.

Additionally, we were at a time where market valuations were at a strong level, which meant that we would get a good value for the company. When we were approached by Perot Systems Government Services, we believed that company would be a good fit and that this would therefore provide a great opportunity for the employee population to continue to grow with the business. And finally, I was personally ready for a new challenge in my life. Although none of these factors made it critical that we sell at this time, and I was personally ready to continue to run the business for many more years if a sale had not worked out, things did come together well and we sold.

ExecutiveBiz: QSS Group experience rapid growth in a short time. What were the 3 keys areas to your company success?

Frank Islam: Although there are many factors that go into success, some key things that contributed to our success were:

ExecutiveBiz: What is your view of the upcoming rule change by SBA on recertification?

Frank Islam: It is clearly impossible to tell exactly what the impact will be until we see how each of the agencies actually implement it. It will definitely impact the M&A market in the short-term, but I suspect the market will quickly adjust. Although I believe this action was a well-intentioned effort to correct a perceived problem, in the end I am not sure it will be in the best interest of the government customer to limit the flexibility of small businesses to seek additional investors or affect an ownership change. These are natural events in the evolution of a business.

ExecutiveBiz: The M&A activity in the government space have been very active. Do you expect that to continue?

Frank Islam: Generally, I do believe it will remain active, primarily because I think the government market is an attractive one that will remain so regardless of changes in the administration. With the government’s focus on “best value” and its continually changing requirements, contractors will look to combine to gain leverage or expertise so as to be in the best position to fulfill the government’s requirements. There are many good, solid companies out there that serve this market, and most want to grow and diversify their business base so most will likely consider some sort of M&A activity (either as an acquireror or acquiree).

ExecutiveBiz: What about the sale to Perot did you learn or surprised you?

Frank Islam: I spent a lot of time both generally considering a sale and getting to know the Perot Systems (as well as their management team) before I made any sort of commitment. As I stated previously, I believed the two companies would fit well together and that this made sense for both of us. As a consequence, nothing really arose during the process that surprised me or that I wasn’t prepared for in some fashion.

ExecutiveBiz: What advice would you give a CEO of a government contracting company looking to sell his or her company in today’s market?

Frank Islam: In general, be realistic and patient. It is important to understand your company’s strengths and weaknesses and consider what that means with regard to valuation. It is also important to consider what “things” are important to you in any sort of deal---whether it relates to key terms of the agreement or the potential opportunities for your employees or even your continued personal involvement. These are examples of things that will impact a transaction and which are likely to be a bit different for each individual seller. If you have considered these in advance, you can deal with them in any initial discussions and avoid spending a lot of time pursuing a deal that you ultimately might not be happy with or might not work. There are a lot of great companies out there that are likely going to be interested in your company, but you need to be patient, not rush the process (or be rushed) and maintain your focus on running your business.

ExecutiveBiz: What does the future hold for you?

Frank Islam: As I stated earlier, I am interested in some new challenges. I have established an investment company and plan to seek some small, start-up opportunities that can benefit from both some investment dollars and some management guidance and advice. At the moment I am pursuing some opportunities in the health care field, and I have already invested in a small clinic that provides CT body scans, both from a diagnostic perspective and a general wellness perspective. I believe that there is a growing demand for non-evasive screening of targeted organs or areas (or the full body) to detect any problems on a preventative basis. I am very optimistic about this venture’s potential to grow in this area and to expand into new areas.

ExecutiveBiz: What is something most people don’t know about you?

Frank Islam: I have a keen interest in politics. I very much enjoy world history and spend a lot of my free time reading about it. It provides a great perspective to the problems we face today.

Distinguished guests, friends, ladies and gentlemen:

Thank you very much.  I want to sincerely thank the National Association of Small Disadvantaged Businesses for honoring me with this award.  I am extremely grateful to the Executive Committee of the NASDB.  I am honored that I am the first SDB to win this prestigious award.

I would also like to thank the SBA for their support.  My special thanks is to NASA   NASA has helped us a lot.  Without NASA’s support, the remarkable success story of QSS would have never happened.

I have known Hank Wilfong for a long time.  He has helped me and QSS a lot, especially when QSS was struggling as an 8(a) graduate.  People like Hank inspire all of us.  Thank you Hank.

Let us do our part to ensure that the SDB community can prosper and have a bright future.  It is the future that beckons to us.

Let us fulfill Hank’s vision.  Let us commit ourselves to ensure that his dream shall never die.

Thank you once again.   God bless you.

PEROT SYSTEMS TO ACQUIRE

QSS GROUP, INC.

Fairfax, VA – (December 18, 2006) –  Perot Systems Corporation (NYSE: PER) today announced that it has signed a definitive agreement to acquire QSS Group, Inc., a U.S. federal government information technology services company based in Lanham, MD.  

Through this acquisition, Perot Systems strengthens its platform for growth within the federal government services sector, gains several significant government-wide acquisition contracts (GWAC’s) and further strengthens its IT capabilities, including information assurance and applications development and management.  It also expands both the scope of services and the areas Perot Systems serves within the Department of Homeland Security and the Department Defense.

“QSS Group’s experience, client relationships and strong team of talented professionals are a perfect complement to Perot Systems’ government services team,” said Peter Altabef, president and CEO of Perot Systems.  “With this acquisition, we will be even better positioned to support the important work of our government clients.”
Following the acquisition, Perot Systems Government Services will have more than 3,400 associates serving the federal government and is expected to report 2007 full year revenue of approximately $600 million.
QSS Group’s clients include the Army, Coast Guard, Department of Health and Human Services, NASA, NOAA, Department of Treasury and the intelligence community.  The company currently operates as the prime contractor on more than 90% of its contracts.

Government-wide acquisition contracts (GWACs) held by QSS Group include the Department of Homeland Security’s Enterprise Acquisition Gateway for Leading-Edge Solutions (EAGLE), the Army’s Information Technology Enterprise Solutions (ITES-2), the Department of the Treasury’s Total Information Processing Support Services (TIPSS-3), and the General Service Administration’s Millenia Lite.  QSS Group’s awards under EAGLE complements Perot Systems’ award. 

“QSS is an excellent addition to Perot Systems and the synergies gained in this transaction will provide expanded growth opportunities for our federal unit,” said Jim Ballard, president of Perot Systems Government Services.  “Our goal is to optimize our capabilities to ensure we always deliver the most effective and efficient results to the government and integrating these two groups will further enhance our ability to accomplish these goals.”
“We are very pleased to join forces with Perot Systems,” said Frank Islam, CEO of QSS Group. “QSS and Perot Systems have complementary capabilities and very similar cultures, and I believe that together the two companies will produce a powerful government services growth engine. As a result, this acquisition will create even better advancement opportunities for our hardworking team.”

Perot Systems expects QSS Group to achieve revenue of between $260 million and $280 million for full year 2007.  Perot Systems expects to close the acquisition during January and will consolidate revenue for the balance of the year.  

Perot Systems will acquire QSS Group for $250 million of cash. The acquisition is expected to be accretive on a cash earnings per share basis, which excludes expense related to the amortization of acquisition-related intangible assets, by $.05 per share for full year 2007.  Acquisition-related intangible asset amortization expense for full year 2007 is expected to be approximately $14 million, equal to approximately $.07 per share.  Perot Systems expects to complete the integration activities associated with this acquisition during 2007.  Including the effect of acquisition-related intangible amortization expense, this acquisition is expected to be accretive to earnings per share beginning in 2008.

About Perot Systems

Perot Systems is a worldwide provider of information technology services and business solutions. Through its flexible and collaborative approach, Perot Systems integrates expertise from across the company to deliver custom solutions that enable clients to accelerate growth, streamline operations, and create new levels of customer value. Headquartered in Plano, Texas, Perot Systems reported 2005 revenue of $2.0 billion. The company has more than 20,000 Associates located in North America, Europe, and Asia. Additional information on Perot Systems is available at http://www.perotsystems.com.
Cash earnings per share is a non-GAAP measure used by Perot Systems to measure the earnings impact of an acquisition prior to the effect of acquisition-related intangible amortization expense.  The information necessary to reconcile this measure to the GAAP earnings per share impact is located in this press release, with the GAAP earnings per share impact being equal to cash earnings per share less the earnings per share impact of acquisition-related intangible asset amortization expense.

This press release contains forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Among many factors that could affect our business and cause actual results to differ materially are that we may bear the risk of cost overruns for custom software development and implementation services, our contracts generally contain provisions that could allow customers to terminate the contracts and sometimes contain provisions that enable the customer to require changes in pricing, and some contracts contain fixed-price provisions or penalties that could result in decreased profits. Please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2005, as filed with the U.S. Securities and Exchange Commission and available at http://www.sec.gov/, for additional information regarding risk factors. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise.