GROUP MEMBERS

FATEH ULLAH KHAN WAQAS ULLAH JAN SALMAN KHAN MUHAMMAD JASIM ATIQ UR REHMAN

CHANGE MANAGEMENT IN EMERGING MARKETS

EMERGING MARKET DEFINITION



Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, industrialization. 2006, there are around 28 emerging markets in the world. world. The economies of China and India are

considered to be the largest. largest.

CHANGE
The process of becoming different. different. An event that occurs when something passes from one state or phase to another. another. THERE CHANGE Change is must for growth and development. development. Change may be positive as well as negative. negative. IS NOTHING PERMANENT EXCEPT

CHANGE MANAGEMENT
The complete set of processes employed on a project to ensure that changes are implemented in a visible, controlled and orderly fashion. fashion. OR Change management is a structured approach to shifting/transitioning individuals, teams, and

organizations from a current state to a desired future state. state.

CHANGE MANAGEMENT IN EMERGING MARKETS

CHINA

INDIA

POLITCAL REFORMS

Major combat in the Chinese Civil War ended in 1949 with the Communist Party of China in control of mainland China, and the Kuomintang China, (KMT) retreating to Taiwan, Republic of China Taiwan, (ROC), On 1 October 1949, Mao Zedong 1949, proclaimed the People's Republic of China "Communist China" and "Red China" were two common names for the PRC. PRC.

The Mao Zedong era (1949-1979):



Mao declared the founding of the People's Republic of China on October 1, 1949. Mao's first goal was a total overhaul of the land ownership system, and extensive land reforms.

The Great Leap Forward and Cultural Revolution and many others during Mao's era (1949 1976) contributed to or caused millions of deaths, incurred severe economic costs, and damaged China's cultural heritage. The Mao Zedong era was the Failed era of Communist.

Deng Xiaoping (1979-1997):



After Mao's death in 1976 and the arrest of the Gang of Four(Jian Qing, Wang Hongwen, Yao Wenyuan, and Zhang Chunqiao.), blamed for the excesses of the Cultural Revolution, Deng Xiaoping quickly wrested power from Mao's anointed successor Hua Guofeng.

Deng Xiaoping was in fact the Paramount Leader of China at that time, his influence within the Party led the country to significant economic reforms.

Deng Xiaoping

Navigated China into a two systems

socialist/capitalist economy

1989 2003 Economic nationalism



Deng Xiaoping retired from public view and power was passed onto the third generation of leadership led by Jiang Zemin.

Jiang's period saw a continued rise in social corruption in all areas of life. Unemployment skyrocketed as unprofitable SOE's were closed to make way for more competitive ventures, internally and abroad.

The 1990s saw two foreign colonies returned to China, Hong Kong from Britain in 1997, and Macau from Portugal in 1999.

2002 present


The first major crisis faced by China in the 21st century as a new generation of leaders led by Hu Jintao after assuming power was the public health crisis involving SARS, an illness that seemed to have originated out of Guangdong province.

In gradual steps to consolidate his power, Hu Jintao removed Shanghai Party Chief Chen Liangyu and other potential political opponents amidst the fight against corruption, and the on-going struggle against once powerful Shanghai clique.

ECONOMIC REORM

After China's involvement in the Korean War in 1950, with its resulting embargo and isolation from Western nations, catching up to the industrialized powers also became a necessity for national security.

After recovering from wartime destruction in 1952, the Chinese government set heavy industry as the priority sector of economic development. The goal was to build, as rapidly as possible, the country's capacity to produce capital goods and military materials. This development strategy was implemented through a series of Five-Year Plans.

Sector Shares of State Capital Construction Investment Five-Year Plan Agriculture (%) 7.1 11.3 17.6 10.7 9.8 10.5 5.1 8.9 Light Industry Heavy (%) Industry (%) 6.4 6.4 3.9 4.4 5.8 6.7 6.9 6.2 36.2 54.0 45.9 51.1 49.6 45.9 38.5 45.0 Other (%) 50.3 28.3 32.6 33.8 34.8 36.9 49.5 39.9

First
Second 1963-1965 Third Forth Fifth Sixth 1953-1985

Source: State Statistical Bureau, Zhongguo gudingzichantouzi

1958 to 1963


Mao had toured China and concluded that the Chinese people were capable of anything and the two primary tasks that he felt they should target was industry and agriculture. Mao announced a second Five Year Plan to last from 1958 to 1963. This plan was called the Great Leap Forward.

Deng's first reforms began in agriculture, a sector long neglected by the Communist Party.

1978 84


By the late 1970s, food supplies and production had become so deficient that government officials were warning that China was about to repeat the "disaster of 1959"

Reforms were also implemented in urban industry to increase productivity. A dual price system was introduced, in which state-owned industries were allowed to sell any production above the plan quota, and commodities were sold at both plan and market prices, allowing citizens to avoid the shortages of the Maoist era.

1984 93


During

this

period,

Deng

Xiaoping's

policies

continued beyond the initial reforms.



Controls on private businesses and government intervention continued to decrease, and there was small-scale privatization of state enterprises

The economy grew quickly during this period, economic troubles in the inefficient state sector increased.

continue


Heavy losses had to be made up by state revenues and acted as a drain upon the economy. Inflation became problematic in 1985, 1988 and 1992. Privatizations began to accelerate after 1992, and the private sector surpassed the state sector in share of GDP for the first time in the mid-1990s. China's government slowly expanded recognition of the private economy, first as a "complement" to the state sector (1988) and then as an "important component" (1999) of the socialist market economy.




1993 present
Despite Deng's death in 1997, reforms continued under his handpicked successors, Jiang Zemin and Zhu Rongji, who were ardent reformers. In 1997 and 1998, largescale privatization occurred, in which all state enterprises, except a few large monopolies, were liquidated and their assets sold to private investors. Between 2001 and 2004, the number of state-owned enterprises decreased by 48 percent.[14] During the same period, Jiang and Zhu also reduced tariffs, trade barriers and regulations, reformed the banking system.

EDUCATIONAL REFORMS

Since the end of the Cultural Revolution (1966 76), the education system in China has been geared toward economic modernization.[citation needed] In 1985, the national government ceded responsibility for basic education to local governments through the Central Committee of the Chinese Communist Party's "Decision on the Reform of the Educational Structure.

Official commitment to improved education was nowhere more evident than in the substantial increase in funds for education in the Seventh Five-Year Plan (1986 90) .

continue
which amounted to 72 percent more than funds allotted to education in the previous plan period (1981 85). In 1986 some 16.8 percent of the state budget was earmarked for education, compared with 10.4 percent in 1984. Investment in education has increased in recent years; the proportion of the overall budget allocated to education has been increased by one percentage point every year since 1998.

Investment in education has increased in recent years; the proportion of the overall budget allocated to education has been increased by one percentage point every year since 1998 China's educational horizons are expanding. Ten years ago the MBA was virtually unknown but by 2004 there were 47,000 MBAs, trained at 62 MBA schools. Many people also apply for international professional qualifications, such as EMBA and MPA; close to 10,000 MPA students are enrolled in 47 schools of higher learning.

The number of foreign students studying in China has also increased rapidly; in 2004, over 110,000 students from 178 countries were studying at China's universities.

The government has committed itself to markedly raising educational levels generally, as evidenced in a Ministry of Education program; by 2020, of every 100,000 people, 13,500 will have had junior college education or above and some 31,000 will have had senior high school schooling; rates for illiteracy and semi-literacy rate will fall below three percent; and average schooling duration across the population will increase from today's eight years to nearly.

SCIENCE & TECHNOLOGY REFORMS

After the establishment of the People's Republic in 1949, China reorganized its science establishment along Soviet lines a system that remained in force until the late 1970s, when China's leaders called for major reforms. On November 1, 1949, the Chinese Academy of Sciences was founded, amalgamating research institutes under the former Academia Sinica and Beijing Research Academy During the 1950s China sent about 38,000 people to the Soviet Union for training and study. The Soviet Union dispatched some 11,000 scientific and technical aid personnel to China. An estimated 850 of these worked in the scientific research sector,

1950s to 1970s  The period of the Great Leap Forward (1958 60) saw efforts to reassign scientists to immediately useful projects, to involve the uneducated masses in such research work as plant breeding or pest control, and to expand rapidly the ranks of scientific and technical personnel by lowering professional standards.  During the decade between 1966 and 1976, China's leaders attempted to create a new structure for science and technology characterized by mass participation, concentration on immediate practical problems in agriculture and industry, and eradication of distinctions between scientists and workers.

The

early

1970s

were

characterized

by

mass

experimentation, in which large numbers of peasants were mobilized to collect data and encouraged to view themselves as doing scientific research.


The March 1978 National Science Conference in Beijing was a milestone in science policy. The conference, called by the party Central Committee, was attended by many of China's top leaders, as well as by 6,000 scientists and science administrators. Its main purpose was to

announce publicly the government and party policy of encouragement and support of science and technology.

In the late 1980s, most Chinese researchers worked in specialized research institutes rather than in academic or industrial enterprises. The research institutes, of which there were about 10,000 in 1985. In the late 1980s, the Chinese Academy of Sciences remained the most prestigious research agency in the natural sciences. In 1986 the academy employed 80,000 persons, over 40,000 of whom were scientific personnel.

In 1987 China had scientific-exchange relations with 106 countries usually in the form of agreements between the China Association of Science and Technology and a foreign equivalent. The more ambitious reform known as the Knowledge Innovation Program was launched in 1998 in the Chinese Academy of Science. The program aimed to consolidate the Academy through reducing the 68,000 permanent positions to 30,000 by 2010 via retirements and re-assigning people to alternate positions.

The government spent 184.3 billion yuan on scientific research and development, 19.7 percent more than in 2003, accounting for 1.35 percent of GDP, the highest in China's history. In 2004, the appropriation for science and technology reached 97.55 billion yuan, 19.5 percent more than in 2003.

POLITCAL REFORMS

India is the world s most populas decmocracy . A parlimentry republic with a multi party system. It system. has six recognized national parties including the indian national congress and bahartiya janta party BJP and more then forty regional parties. parties.

1947 1950 The history of the Republic of India began on 26 January 1950. 1950. The country became an independent

dominion within the British Commonwealth 15 August 1947 Independent India's first years were marked with turbulent India's events a massive exchange of population with

IndoPakistan, the Indo-Pakistani War of 1947 and the integration of over 500princely states to form a united 500princely nation. nation.

1950s 1950s and 1960s 1960s India held its first national elections under the Constitution in 1952, where a turnout of over 60% was recorded. The 1952, 60% recorded. National Congress Party won an overwhelming majority, and Jawaharlal Nehru began a second term as Prime Minister. Minister. President Prasad was also elected to a second term by the electoral college of the first Parliament of India Jawaharlal Nehru died on 27 May 1964. 1964. Lal Bahadur Shastri succeeded him as Prime Minister

1970s 1970s In 1971, Indira Gandhi and her Congress were returned to 1971, power with a massively increased majority. majority. The nationalization of banks was carried out, and many other socialist economic and industrial policies enacted. enacted. In 1974, India tested its first nuclear weapon in the desert 1974, of Rajasthan. India's population passed the 500 million Rajasthan. mark in the early 1970s, but its long-standing food crisis 1970s, longwas resolved with greatly improved agricultural productivity due to the Green revolution Indira called for elections in 1977, only to suffer a 1977, humiliating electoral defeat at the hands of the Janata Party, Party, an amalgamation of opposition parties. Morarji Desai parties. became the first non-Congress Prime Minister of India. nonIndia.


1980s 1980s Indira Gandhi and her Congress (I) party were swept back into power with a large majority in January, 1980But 1980But the rise of an insurgency in Punjab would jeopardize India's security. security. On 31 October 1984, the Prime Minister's own Sikh 1984, bodyguards killed her, and communal violence erupted in Delhi and parts of Punjab, causing the deaths of thousands of people along with terrible pillage, arson The Congress party chose Rajiv Gandhi, Indira's older Gandhi, son as the next Prime Minister. Rajiv had been elected to Minister. Parliament only in 1982, and at 40, was the youngest 1982, 40, national political leader and Prime Minister ever. ever.

1990s 1990s On 21 May 1991. In the elections, Congress (I) won 244 1991. parliamentary seats and put together a coalition, returning to power under the leadership of P.V. Narasimha Rao. This Rao. CongressCongress-led government, which served a full 5-year term, initiated a gradual process of economic liberalisation and reform, which has opened the Indian economy to global trade and investment. investment. The Bharatiya Janata Party (BJP) emerged from the May 1996 national elections as the single-largest party in the singleLok Sabha but without enough strength to prove a majority on the floor of that Parliament. Under Prime Parliament. Minister Atal Bihari Vajpayee, Vajpayee,


. New elections in February 1998 brought the BJP the largest number of seats in Parliament (182), but this fell 182), far short of a majority. On 20 March 1998, the President majority. 1998, inaugurated a BJPBJP-led coalition government with

Vajpayee again serving as Prime Minister. On 11 and 13 Minister. May 1998, this government conducted a series of 1998, underground nuclear tests, prompting President of the United States Bill Clinton and Japan to impose economic sanctions on India .

20002000-present  Throughout 2003, India's speedy economic progress, 2003, political stability. stability.  In January 2004 Vajpayee recommended early dissolution of the Lok Sabha and general elections. The Congress elections. PartyParty-led alliance won an upset victory in elections held in May 2004. Manmohan Singh became the Prime Minister, 2004. after the Congress President Sonia Gandhi, Gandhi,  Manmohan Singh became the first Sikh to date to hold India's most powerful office. office.  The 21st century saw India improve relations with many 21st States, countries and foreign unions including the United States, the European Union, Israel and the People's Republic of Union, China. China. The economy of India has accelerated by growing at a very rapid pace. India is now being looked at as a pace. potential superpower. superpower.

ECONOMIC REFORMS

Economy play the role of back bone in development of any nation. nation.

The Economy of India is the ninth largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP).[1] The country's per capita GDP (PPP) per (PPP). IMF, 129th) 2010. capita is $3,339 (IMF, 129th) in 2010. Following strong economic reforms from the post-independence socialist posteconomy, the country's economic growth progressed at a rapid pace, as free market principles were initiated in 1991 for international competition and foreign investmen

INDIA S STRATEGY OF ECONOMIC DEVELOPMENT

 

India s economic development strategy immediately after Independence was based primarily on the Mahalanobis model, which gave preference to the investment goods industries sector, with secondary importance accorded to the services and household goods sector (Nayar, 2001). For Nayar, 2001) example, the Mahalanobis model placed strong emphasis on mining and manufacturing (for the production of capital goods) and infrastructural development (including electricity generation and transportation). transportation).

1950 to 1960
in the late 1950s and 1960s, the government established 1950s 1960s, public sector enterprises in such areas as production and distribution of electricity, petroleum products, steel, coal, and engineering goods. goods. In the late 1960s, it nationalized the banking and insurance 1960s, sectors. sectors. To alleviate the shortages of food and other agricultural outputs, it provided modern agricultural inputs (for example farm machinery, irrigation, high yielding varieties of seeds, chemical fertilizers) to farmers at highly subsidized prices 1970

19701970-1980
In 1970, to increase foreign exchange earnings, it 1970, designated exports as a priority sector for active government help and established, among other things, a duty drawback system, programmes of assistance for market development, and 100 per cent export-oriented exportentities to help producers export. export. The rate of growth improved in the 1980s. 1980s From 1980 to 1989, the economy grew at an annual 1989, rate of 5.5 percent, or 3.3 percent on a per capita basis. basis. Industry grew at an annual rate of 6.6 percent and agriculture at a rate of 3.6 percent. A high rate of percent. investment was a major factor in improved economic growth. growth. Investment went from about 19 percent of GDP in the early 1970s to nearly 25 percent in the early 1980s 1970s 1980s

1990 to present
Economic reform started in India in 1990. 1990. Since 1990, there has been no looking back for India. The 1990, India. economy has become much stronger and if we continue on this path for 20 more years, we will become one of the world s top three economies From 1992-1993 through 2000199220002001, 2001, economic growth averaged an unprecedented 6.3 per cent per year. year. The GDP in 1990 was some $300 billion. Today, it is upwards billion. of $1.5 trillion. We used to get almost zero FDI then; last trillion. then; year, we got $30 billion. Our foreign exchange reserves were billion. $6 billion then, they are $300 billion today. We had half a today. million telephone users then; we have 860 million today. We then; today. used to sell 1.8 lac cars then; we sold nearly 3 million last then; year. year. We had 9 million air passengers then; we have 57 then; million now. now.

India economy, the third largest economy in the world, in terms of purchasing power, is going to touch new heights in coming years. As predicted by Goldman Sachs, the Global years. Investment Bank, by 2035 India would be the third largest economy of the world just after US and China. It will grow to China. 60% 60% of size of the US economy. This booming economy of economy. today has to pass through many phases before it can achieve the current milestone of 9% GDP. GDP.

TELECOMMUNICATION REFORMS

Telecommunication Reforms in India revolutionized the telecom industries sector in India, which is an important factor for the growth of the Indian telecom sector and in turn helped the Indian economy to perform well for the past few years. The Telecommunication reforms in India were development and growth oriented.

1980s 1980s
The telecommunication reforms in India started in the eighties with the mission better communication. This is regarded as the first phase of the reformation process. Several private manufacturers of tailor made equipments entered the market. The Videsh Sanchar Nigam Limited (VSNL) and Mahanagar Telephone Nigam Limited (MTNL) were set up under the Government of India's Department of

Telecommunication.

Early Nineties


The second phase of telecommunication reforms in India came in the early nineties. The sector of telecom was a monopoly under the Central Government of India. During the 1990s this sector faced difficult challenges due to the development in the technological sector. The sector was privatized and with the abolition of the monopoly new player entered the consumer market.

The introduction of the New Economic Policy (NEP) in the year 1991 was a landmark in the history of telecom industry sector in India. to The manufacturing sector of was

equipments

pertaining

telecom

decentralized and several value added services were introduced into the market. The telecom services were divided into basic telephony, radio paging and cellular mobile.

Late Nineties
The third phase of the telecommunication reforms in India took place in the period of the late nineties. The government of India introduced the New Telecom Policy 1999. The TRAI was endowed with more power. The concept of revenue sharing was introduced to replace the fixed license fee. The National Long Distance was introduced with free entrance. Moreover, there was introduction of International Long Distance schemes. The Bharat Sanchar Nigam Limited (BSNL), a corporate body of the telecom service sector was formed, followed by the introduction of the Internet to the Indian market.

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