Enchanting Morocco

First impressions

As an Indian travelling around the world, I am used to worrying about visas. Our online visa application for Morocco was approved in 2 hours and it was a sign that this entire country and its people were ready to pull out the red carpet. Immigration agents were so happy to welcome somebody from India and always brought up Shahrukh Khan and his movies. Amitabh Bacchan, Hritik Roshan, Amir Khan and Salman Khan got some mentions as well but Shahrukh is the king khan. It's fascinating how the film industry creates soft power around the world and makes people living so far away feel connected. As we traveled through Morocco's varied landscapes, from the old to the new, from the valleys to the desert, from the Medinas to the Mosques, I kept on admiring how the Arabs and Amazighs have built a successful political system based on Allah, al watan, al malik (God, Country, King) when so many of their neighbors lie in ruin.

The grandeur

Casablanca welcomed us with the magnificent Hassan II mosque built on the shores of the Atlantic.It's a masterpiece in Islamic architecture but also reminds one of European cathedrals. Marrakech as the imperial capital of the Almarovid dynasty boasts of some beautiful buildings like the Ben Youssef Madarassa and the Bahia palace. Fes, the first imperial capital has the Royal palace. But the most fascinating characteristic of these cities is the presence of magnificent Raids (houses) and Paliases (more opulent houses) throughout the old city medinas with nodescript entrances which make them literally hide within plain sight. Most of these Raids and Paliases have now been converted into hotels and it's an experience to stay in one of these places when visiting Morocco. As we understood later through our English speaking lady guide in Fes, hiding the grandeur behind closed doors is a truly Islamic practice. Fascinating to see the contrast with the Mellah (old Jewish quarter) which had open balconies. Mellah means salt in Arabic and Jews were salt traders so Jewish quarters across the Arab world are called Mellahs.

Hassan II mosque, Casablanca

Beautiful interiors of a Raid

The Mellah with open balconies

The reason so much grandeur exists and has been preserved to this day is a testament to the importance given to art and architecture by succeeding Arab dynasties as well as the elites in society. While the Sultan could have spent money building a mosque or a royal palace, many affluent private citizens must have paid for the numerous Riads and Paliases.  

The landscape

From the Atlantic shores of Casablanca and Agadir to the deserts of the Sahara. From the High Atlas mountains across the south east to the Mediterranean port of Tangier. From the bustling modern French speaking city of Casablanca to Ait ben Haddou, a castle on the ancient caravan route from Timbuktu. Ifrane (Little Switzerland) where beautiful fountains and plazas were built by the French to the 12th century Fes Medina with 9000+ streets and the world's largest car free urban area. This diversity is amazing for a country the size of California.

A mule ride up the High Atlas took us to a traditional house to have lunch. A camel ride over the sand dunes of the Sahara was a mesmerizing experience. Travelling on 4x4 vehicles across the barren landscape of the desert, we visited nomad tents and were served bread and tea. As we climbed on top of Ait ben Haddou, I imagined how camel caravans coming from Timbuktu would have asked for food and rest before heading towards Marrakech. Morocco also managed to slip in a beautiful gorge which reminded me of Zion National Park, Utah!

Climbing the High Atlas on mules took us to a traditional house where we had lunch overlooking Mt. Toubkal which is the highest point in North Africa

Camel Safari

Moon rise over the Sahara

Barren landscape of the desert

Ait ben Haddou. A UNESCO World Heritage site on the caravan route

Fes Medina, the largest car free urban area in the world

Toudgha gorge

People, Islam and culture

Amazighs are the indigenous people of the region in North Africa called the Maghreb. The Europeans and later Arabs referred to them pejoratively as barbarians which became 'Berbers'. While the Amazighs all eventually converted to Islam, they maintained their language, food and practices. In general the Amazighs dominate the countryside south and east of the Atlas mountains while the Arabs dominate the cities and north west. While the Amazighs have faced persecution and discrimination from time to time, they are now a recognized minority. Their language is recognized as an official language and they are allowed to display their own flag. In Ifrane (little Switzerland), the statue of the now extinct Atlas Lion was dressed in Christmas spirit and Christmas lights and candy cane decorated the town square. Morroco boasts of 1000 plus Sufi traditions when many other Islamic countries have persecuted Sufism. Such things make clear to a visitor the moderation of Moroccan society and probably the reason for its progress and stability.

Atlas Lion in Christmas spirit in Ifrane

Islam is all encompassing in the life of Moroccans as is true with almost all countries with a majority Muslim population. Every town or village has a mosque with a minaret and no other building is allowed to be taller than that. Hotels have a sticker on the ceiling showing direction of Mecca so guests would know which direction to pray to. Public buildings have a prayer room and the nearby restroom will have an area where one can washup (abulation) before prayer which is mandated in Islam. The Moroccan flag has a 5 pointed star for the 5 pillars of Islam. And I am sure there won't be any legal shop selling pork although I was told the government does allow Wine production as economics probably trumps religion!

But in spite of the all encompassing religion, it is surprisingly not in your face as a visitor and the incredible magnanimity and kindness shown by everyday people makes Morocco the best antidote to Islamophobia. Most women on the streets are seen wearing a head scarf but there were many others, especially in big cities who let their hair flow. I never saw a full face veil (hijab). I saw ladies shaking hands with men, even in rural communities and women police officers. Our guide in Fes was a smart modern lady (with a head scarf) who didn't hesitate to go grab the hand of a blind man on the street to help him out. 

At the airport, a sweeper just smiled and offered to take away my garbage without any expectations of a tip. The immigration officer came around to put a hand around my son's shoulders and asked us if we liked our stay in Morocco and thanked us. And yes he mentioned that he liked Shahrukh Khan! When a young girl walked by trying to sell us some home made sweets (more like a beggar than a seller), my guide looked at her with warmth (not malice), smiled and just said shukran. 

Throughout our trip, we walked around medieval Medinas similar to Mumbai's Crawford market or Delhi's Chandni Chowk but the area was surprisingly clean. We never saw open sewers, open defecation or spitting in public. All places frequented by tourists had a western toilet which was reasonably clean and with a wash basin with soap. 

Food

We experienced Morrocan food as mostly dominated by tajines. A tajine is a slow cooked mix of vegetables and meat in a uniquely shaped pot which is also called a tajine. We did not see a lot of variety in tajines with most restaurants serving a kind each of chicken, lamb, beef and vegetarian. Light on spices and salt and with little gravy, one could only have a small slice of bread with a pot of tajine before the gravy dries off. No rice is served as part of the main dish making the tajines a low carb, low spice diet.  The other common item on the menu was cous cous, the usual variety with vegetables and meat mixed in.

The mainstay of every place we visited was the Moroccan mint tea. Brewed green tea like concoction with fresh mint leaves was a refreshing warm drink. We were served tea at the village house in the high Atlas, by the Berber family making traditional carpets, by the nomads in the desert, by the fancy riads in Marrakech and Fes, at our desert camp in the Sahara and everywhere else in between! 

Moroccan pastries are made with different kinds of fried dough. Very different flavors which may need getting used to. I wasn't very impressed.

We tried the amlu which is Morocco's version of nut butter made with almonds, argan oil and honey. Yummy spread which we packed for us back home!

The berber pizza was quite delicious, very close to an Indian stuffed meat paratha.

The Pastille is a vegetable/meat pastry which we tried. We happened to like the vegetarian version.

Jemaa el Fna in Marrakech has numerous food stalls which prop up every night selling everything from Sheep's head to kababs and tajines. Jemaa el Fna was also the only place where the touting by food stall owners was annoying and I couldn't even take a peek, forget tasting the range of food on offer.  One of the stall owners even called me as-salamu alaykum Amir Khan to which wa 'alaykum as-salam brought a smile to his face. I kept wondering to myself that despite having grown up in a city which has ~40% Muslims, how many times in my life have I ever said that? It's a sad reality of modern day segregation. 

Camel meat and camel milk is sold in some places and there was a camel burger on the menu in our hotel in Fes. I felt sorry for the Camel who we had just used as our transport in the desert and didn't have the stomach to try its meat.

(left) Chicken tajine with preserved lemons & apricots; (right) a tajine pot

(left) Our table set with salad and Khobz; (right) a Berber pizza

Jemma el Fna, Marrakesh at night is a bustling place full of street food and cacophony

Final thoughts

As our return flight took off from Casablanca's Mohammed V international airport, the beautiful sight of the African coastline was the perfect adieu to this fabulous country. I could see the Hassan II mosque on its coastline. A young boy must be standing there looking towards the Atlantic and dreaming about America which lies exactly straight across. But it's time for young boys and girls in America and around the non-Muslim world to stand off their shores and look across the ocean towards this wonderful country and visit it once in their lifetime. Getting to know each other is the only way humanity can live in peace. Inshallah! 

Leaving the shores of Africa

Why we are everywhere and why actually we aren't

I have heard a number of statements and claims since I have come to the US regarding how ‘big’ the Indian community here is or how ‘we are everywhere’. I hear how Silicon Valley companies are full of Indians or how Texas and New Jersey makes you feel as if you are in India.

But is this really true? With my sense of history, it just doesn’t feel right.

America is mostly White and Caucasian filled by centuries of migration from Europe and then by Blacks who were brought in as slaves and indentured laborers and Latinos who spread or ran from the south American Spanish colonies. And then came the Chinese laborers during the gold rush and 19th century industrialization and countless other minorities from Asia, Africa & the Pacific. Indians would have been a trickle up until the 1990s mainly because Indians weren’t mass persecuted like the Jews or weren’t running from famines like the Irish. Indians didn’t probably feel the need to travel or couldn’t travel such a distance for doing hard labor like the Chinese who again were escaping persecution. Why Indian’s didn’t migrate is not my point. The point is they didn’t migrate in great numbers to America up until the tech revolution got white collared technology workers on US shores in droves – which brings us back to the hypothesis that ‘Indians are everywhere’.

Let’s see what the US Census has to say.   The US uses a catchall term ‘Asians’ to refer to anybody coming from the Asian continent and doesn’t distinguish Indians from Chinese from Koreans. Nevertheless, non-Hispanic Asians makes up only 4.7% of the population. Considering that Chinese have been coming from a far longer periods and it continues to this day, they should be making up a major share of this 4.7%. How much Indians do you think could be here? 1-2%? Maybe.

See US demography

In states where it ‘feels like’ Indians are everywhere, the Asian population is a little higher. California (13%), New Jersey (8.3%), New York (7.3%) with NYC as high as 11.8%. Some other states in which you may feel there are a lot of Indians  only have clusters of Asian population density like Austin, TX is at around 6% but overall Texas is only 3.8% Asian

And mind you, all these numbers are for ‘Asians’. The California demographic page on Wikipedia says only 10% of Asians are Indians in California

See California demography

All the numbers above taken at 10% look pretty small, don’t they?

Right, let’s get down to the ‘feel’ of Indians dominating the tech workforce. Luckily, some of the tech companies released reports giving diversity data for reporting to the equal opportunity commission.

Google – 30% “Asian” for the US workforce. Whatever the Indian population among this 30%, we can’t sure go around shouting that Google has a ‘majority’ of Indians

Linkedin – they combined data for their California, Brazil and Bangalore offices giving Asians 38% but a high of 60% in tech. Including Bangalore doesn’t answer our question though L

Yahoo – doesn’t matter any more as its sold! But it said 57% if US tech employees were Asian

Ebay – their own website says 55% of tech employees are Asian. That falls to 24% overall

Then why is there this ‘feel’?

I have a theory to this ‘feel’ which is 2 fold.

One, humans tend to live and socialize with people from their own background. So Indians tend to make Indian friends, tend to live in localities were there are some other Indians to socialize. We visit Indian grocery stores, frequent theatres which show Hindi movies and then eat at the Indian restaurant nearby. Not to say Indians don’t make non-Indian friends, they surely do. But there is definitely a bias. Ask a non-Indian where one can see Hindi movies. The blank of the face would tell you we aren’t everywhere

And two, our mind just registers and remembers people like ourselves more than it registers other people. I probably remember seeing an Indian on a train rather than a Polish or Japanese. I probably register that there are 3-4 Indian guys sitting around my office floor. I have no idea how many Latinos there are, never bothered to care

So now I know why we are everywhere and why actually we aren’t!

Dignity

My first travel to the ‘West’ was when I went to London by British Airways. I thought the airhostess was rude, behaved as if she was doing a favor. I visited a pizzeria in London during my trip and I thought the waitress was rude, behaved as if she was doing a favor.

Why did I think so? Because as an Indian, the concept of ‘class’ and ‘privilege’ is ingrained in our minds. A waitress is supposed to talk and behave in a certain way, greet you when you come and when you leave. Say sorry and thank you for everything. Serve you food and basically treat you like a master. There was none of it coming. Although I still think the waitress and the airhostess were rude, the degree to which I think so is far lesser. I wish I have a chance to replay that exact sequence of events and make a re-judgment.

Now in America, I see a similar replay of things every day.

As I played with my son in a nearby park, I was surprised to see the lady who cleaned our house last week playing there with her daughter, in the same park! Imagine that in India and I realized how socially segregated we lived all our lives. The lady demands top dollar, wears clean clothes and we treat each other as equals. (but… kamwali ki ladaki ke saath khelega mera beta?)

The postman, garbage collector, carpenter, electrician, sweeper all work with a sense of pride and self-respect.  They keep their head high and you learn to treat them as equals. You exchange ‘Good morning’, ‘Thank you’, ‘Have a nice day’ with all and sundry. There are no servants in most places. No bell boys in budget hotels, no doormen – the kind you see dressed as ‘security’ all across India in front of all sorts of buildings. No ‘salaam sahib’

Of course some of this is attributed to an absence of cheap labor but what it has done is also ingrained a culture of dignity. You can technically get all these services just that they cost a lot so you start questioning it and many a times realize you didn’t need it in the first place.

Not that everything is hunky-dory. Race relations between blacks and whites are at a low, there still is black segregation implicitly in places you live or work while latinos & illegal immigrants do a lot of low paid work. But low is relative, it’s not that low when you compare to Asia.

Dignity of labor treats all humans respectfully and ingrains in you that all work is dignified.

Bottom line? Other than washing & ironing your clothes, cleaning your house and kitchen, polishing your shoes and washing your car you also learn carpentry, plumbing, masonry, wall painting, landscaping & gardening, fixing everything (remember when you opened something as a kid and your uncle said you would be an engineer? Put that to use!)

Or you aspire to become a millionaire so that you don’t have to do all this

And that my friends is the secret of what drives American ambition :-P

How difficult can it be to get passport photos at a reasonable price?

This may seem trivial but it’s no joke. US Passports apparently require only 2 photos hence most photo printing services give you 2 photos for a fee of around $13. Side note – photo services are provided by most pharmacies like CVS, Walgreens etc. Yes, pharmacies! Quite a weird business combination!

Enter Indian bureaucracy. It turns out; Indian bureaucracy doesn’t go very well with the United States of Convolution. Indian passport application asks for 6 copies which puts these pharmacies in a spin. Confronted by an Indian asking for 6 copies the only solution they have is 6 copies for $13 X 3 = $39!!

It was going to cost 3 of us $117 and I decided to not bow down to this system.

Step 1: Persuade. Went into a CVS, told him we need 6 copies so he can charge something reasonable for the extra copies. He nodded his head as if he understood. He took the pics, printed them out and then presents me with a $117 bill. I decline, argue, even beg but he chooses to throw away the pics in trash than give it to me for anything less than $117. I walk away.

Step 2: Asked a friend to realize that a particular CVS location does do additional copies for 50 cents each. When we drive 30 minutes to it, the person is available only 9-4 so we may have to come back on a Saturday. And he can’t confirm about the 50 cents trick. Probably something unofficial so we won’t know until we came back on Saturday

Step 3: Asked another friend and came to know that COSTCO (a wholesale discount store) does photos cheap. But we don’t have membership and asking some friend to come along just for that seems a bit too much for a trivial task!

Step 4: Realize that we are in the digital age!! Downloaded a DIY app on the iphone, clicked a picture which the app nicely arranges into a grid of 6 passport photos and print at home. But houses here have dim lighting so having bright light and removing shadows isn’t easy. The Indian passport application has clear instruction saying, “Home printed photos will be rejected”. Wherever they got that from!!

Step 5: Enter a Gujarati colleague who suggests a small shop owned by a fellow Gujarati who can do 6 passport photos for $12. I haven’t loved a Gujarati so much my entire life :)

My first contact with Mesoamerica

We could learn just three Spanish words in our everyday struggle to communicate with the old world inhabitants of the new world.

Hola, we said to Me-hi-co which the English speaking world calls Mexico. Part of the greater Mesoamerican landscape, Mexico is organized chaos. Just like good old India! Arriving at Benito Juarez International Airport in Mexico City at midnight was quite an experience. Free baggage trolleys to start with (feels luxurious if you have ever landed in SFO/JFK) but then paid for taxi twice and pushed our bags without the trolley anyway for the experience. Hola! said Mexico to us in return, Spanish for ‘Hello’.

Walking down the streets of Centro Historico in downtown Mexico City, I was amazed at how two countries so far separated by distance and time could be so similar.

 

If I changed the hoardings and billboards to Hindi/Marathi, it would very much feel like you are walking in Mumbai. Bustling markets, crowded streets, haggling in shops, building facades – some flashy, some dilapidated, footpaths – some well laid, some non-existent, numerous traffic police trying in vain to control the menacing vehicular population and everywhere you see there is a sea of brown skin – this is everyday India.

Amazingly, there weren’t many two-wheelers on the road (how did Bajaj and Hero get left out?) but cars and especially taxis do show off their incredible driving skills. Our taxi driver did a quick 100m reverse on a busy highway because we had missed a turn. Our hearts were in our mouth. Now that was special, I hadn’t seen something like that even in India!

As we sat down in one restaurant after another, we kept on asking for our food to be made picante which means Spicy. (My second Spanish word) But alas, the food was never very spicy to our taste. We were given a super picante salsa as a side which was ‘burn your mouth’ category but it doesn’t compensate for bland food, does it? 

Imagine bland Chicken curry or Chole in India and an extremely spicy pickle on the side. Nah!

Some context….. The American continent was populated by humans around 10,000 years ago when humans crossed the Bering Strait from present day Russia to Alaska and walked down north, central and South America. These set of people were then unknown to rest of the world until Columbus ‘discovered’ the new world in 1492. There are theories of pre-Columbian contact but most are vague and a couple of those which have some basis weren’t permanent. The point is, the indigenous American people developed their own language, culture, tools and invented everything again. The phrase ‘Reinventing the wheel’ is quite literal in this context although they didn’t put the wheel to use – to the bafflement of Europeans. America did not have Cows, Sheep, Chicken, Horse and Pigs – the 5 most important animals for mankind. Nor did it have wheat & rice, today’s staple cereals. They were thriving in spite of it.

The pyramids of Teotihuacan were thus an incredible sight. Built around 200 BC and just 40kms outside Mexico City, the pyramid of the Sun is the 3^rd largest pyramid in the world after the first 2 in Giza, Egypt but with different uses and building styles. Something must be universal about the pyramidal shape, amusing. They knew nothing of the Giza pyramids. While Chanakya was writing Arthashastra in ancient India, Tenochtitlan was a sprawling city and had built these pyramids but didn’t have a writing system.

The Aztecs were ruling this place when the Spaniards captured Mesoamerica and built modern Mexico City on top of Tenochtitlan, the Aztec capital near to Teotihuacan. The remains of ancient temples & palaces can be seen beneath Spanish buildings in Mexico City.

The awe inspiring Cathedral Metropolitan gonged majestically in the downtown but it was so sad to see that it was built on top of an ancient Aztec sacred site. It even used the stones of the Aztec temple beneath.

Museo Nacional de Antropología showcased this Mesoamerican history in a very detailed manner with interesting excavated artifacts and bringing this lost civilization to life.

It was interesting to know that Mesoamerica (which includes present day Mexico, Guatemala and Belize) has numerous cultures & languages and is not homogeneous. Feels like India again? BUT, although 95% of the indigenous population did not survive this civilizational collision there are still a number of them alive today and many more of mixed indigenous and European blood. But, almost all talk Spanish and almost all are catholic Christians.  Again it pained me to see how a native culture and civilization has been eradicated. It’s the good fortune of India that we didn’t get affected by Arab and European diseases (because we were already immune being part of the Eurasian landmass) and Indian civilization had reached a certain level which could help it to defend itself and survive an onslaught from outsiders.

Benito Juarez International Airport wasn’t done with us. As the departure time of our flight to Cancun neared, there was no sign of our flight number on the display boards. Frantic calls to airline customer care and Informacion counters at the airport punctuated with Hola! And Gracias! (My third spanish word which means Thank you!) finally made us understand that the flight was 3 hours late. We understood what it feels to be illiterate.

Cancun is a paradise made to earn American dollars. Beautiful beaches, turquoise blue seas and warm 30 C was a welcome change from Mexico city. 

This place too was probably an ancient Maya settlement but most died after the Spanish conquest and a tourism project by the Mexican government built Cancun to what it is today.

“Museo Maya de Cancún” gave a quick glimpse of the Maya culture but it was nothing new as most of it was covered in the Anthropology museum in Mexico City. The surrounding archaeological site around the museum is interesting though showing ruins of ancient Maya settlement.

The drive from Cancun to Chichen Itza was a 200 km smooth highway and driving in a different country was an interesting experience. Chichen Itza was a Maya city built during 600-800 AD. So when Islam was born in the Arabian peninsula, the Mayas unknown to the old world were building Chichen Itza. 

A tic-tac-toe like pattern on a wall in Chichen Itza. How incredible that human thought can be so much alike!

The Mayas were supposedly very advanced in astronomy and could predict eclipses and used the sun and the moon for time and seasons. Strikes a chord here? Jantar Mantar at Jaipur & Delhi! The ruins in Chichen Itza include places which are thought to be residential, ceremonial or temples. But most of them are so damaged that it leaves a lot to your imagination.

Coming back to the US and looking at English signs all around feels so homely and safe. We are so limited in our worldview.

What would have gone through the mind of that Mesoamerican man when he saw Spaniards wearing steel armor and sitting on horsebacks on his shores? First contact, a chilling thought.

Why are we always ticking boxes?

I love to travel. Having traveled around South East Asia and India, travel to me was always looking at sites. I always looked for famous places, cities, historical monuments, museums, beautiful cliffs or breathtaking beaches. It’s necessary to have something to see and tick a box. “Sightseeing” as it’s called in travel brochures. Once a box is ticked, it’s done. I would never ever go there again. More so because time and money is both precious and limited, and there are so many more boxes to tick!

Hordes of Indians and Chinese do this box ticking around the world. May be it’s in the Asian psyche. The endeavor to get maximum bang for the buck, whatever the bang is, real or imagined.

When I met Europeans who traveled to the same vacation spot every year, I was aghast! Mauritius may be beautiful, but 7 times! Such an incredible waste of time and money! You won’t be able to tick a lot of boxes in your lifetime, I would grin. Then I met Americans. Same incredible waste but at a lesser cost I suppose on New Jersey or Florida shores.

The other type of vacations Europeans and Americans have is ‘doing’ rather than ‘seeing’. How about a camping vacation in the mountains, a skiing trip to Japan or a fishing trip to Alaska? I get tired even thinking of these vacations but somewhere inside I feel an urge to go try it. Too expensive, I console myself although I am not too enthusiastic of a backyard barbecue as well. Too tiring for a lazy bum is putting it more correctly.

Yet another vacation I saw people take (usually non-Asian) was having a stay-cation. Just book a star hotel in your own city, enjoy the pool and food and relax by taking a few days off. But wait a minute, at what cost? (Indian mind wakes up). I could cook my own food at home and relax, for free. And then why take a leave at stay at home (such a waste), I need to save that for my box ticking in December :p

At first I thought, money was the cause and effect of all this. Rich people after ticking all their boxes just want a place to relax and hence end up going to the same places again and again. I will do that someday, so I thought. But the more boxes I tick, there are millions more I see. It struck me then that this is never going to end. When will I be able to take a month off, rent a place in Goa (for example, like the scores of foreign tourists there) and just relax on the warm beaches with fantastic seafood and dazzling festivities? Will my box ticking guilt ever allow me to do that?

Enough of idealism. These firangs don’t know what they are missing. I need to plan my Christmas box ticking.

If not for Anna..

Anna's approach of 'My way or the highway' is surely not what fits in a constitutional democracy but what the nation needs today from its leaders is some moral uprightness and not a lesson in civics!

What we need is a truly independent institution which can admit cases, probe them and prove it in the court of law without any sort of political interference. The Lokpal should become a ‘terror’ in the eyes of politicians and bureaucrats alike. The election commission & the judiciary have special places in the constitution (and the only reason politicians fear them) and something similar should be created for the Lokpal.

Agreed, this is not the end all of corruption. No one’s says that. Totally eradicating corruption is a long drawn battle and would involve work on numerous other problems in the country including poverty, education, healthcare, law and order and many more. It’s a complex question which no one institution or law is going to change. But Lokpal could be a first step in that direction.

Technicalities of the law

1) The government is trying to get away by enacting a toothless anit-corruption law which favors the powers that may. The Prime Minister, junior government officials, MPs actions inside the parliament, court judges is out of the ambit of Lokpal. So most corruption in the country (at the lower rungs of bureaucracy), bigger scams which may happen from the PMO (read bofors), cash for votes inside the Parliament etc go scot free. Then those who are caught and tried can go scot free as well if Judges are in your favor and then they couldn’t be investigated by Lokpal. This is making a mockery of the whole idea of Lokpal.

2) Selection of Lokpal members: Govt. says the selection will be made by a committee consisting of the Prime Minister, the leaders of Opposition in both Houses of Parliament, a Supreme Court judge, a high court chief justice, an eminent jurist and an eminent person in public life. The last two is eyewash, so with 3 politicians and 2 pseudo approvers in a group of 7 selectors, you know what is going to happen. In terms of eligibility, the Jan Lokpal disqualifies anybody who has held a government office in the last 2 years, the govt. obviously makes no such reference.

3) Prosecution: The Jan Lokpal suggests that the CBI’s anti-corruption wing should report to the Lokpal while the govt. says Lokpal should have its own prosecution wing – which will obviously have no experience and there will be jurisdictional and other objections raised from time to time, helping those accused. The CBI will remain a govt. puppet.

4) Then the govt.’s bill does not provide for grievance redressal of citizens, protection of whistleblowers, creation of citizen’s charters by public institutions etc.

So it can be clearly seen what the government is trying to do.

1) The Govt. was in a corner with so many corruption cases blowing up in its face and had to show its commitment towards anti-corruption initiatives. It could have taken its own sweet time but Anna’s campaign made it do things quickly.

2) If not for Anna, most of India wouldn’t have known what law was being passed. The government would have tom-tom’ed about their achievement in passing the law and we would have been mute spectators of the hog wash.

3) If not for Anna, the Lokpal would have become (and could still become) just another puppet created in the archaic structure of governance in the country. Remember what the election commission was earlier? It took 40 years and people like TN Session to make that institution what it is today. Same could happen with the Lokpal with it having real tooth somewhere in 2050 after sacrifices by countless individuals.

What this agitation will materially achieve is something time will tell but Anna Hazare has created that ‘hope’ in millions of Indians that something could be done. I see this agitation from a standpoint that the more people agitate, the more bargaining power we have with the government and more chances of catching corrupt officials in the future. That’s it.

Don’t debate Anna’s methods, no person is perfect. Something is better than nothing.

Jai Hind!

Real Estate, be Realistic!

Equity Mutual Funds Vs Real Estate investment

Disclaimer: I am NOT saying that real estate is a bad investment. What I am trying to say is Real Estate is just like any other asset class and make an informed bet when you put your life's savings into it. It may bring you handsome returns which no other asset class can but it can also give you lousy returns or worst put you in a debt trap.

The analysis below applies for “Residential Real Estate as an investment”. If you are buying your first home to live in, this is not applicable because then Real Estate for you in NOT an Investment, it’s an EXPENSE!

Returns

Equity diversified mutual funds

An equity diversified mutual funds could give you 15% compounded annual growth (CAGR) over the long term and that too tax free.
i.e. Money doubles every 5 years, i.e. 16 times in 20 years.

Some MFs (Like HDFC Top 200) have even given 25% CAGR from 1995 till today while many have not. If you do a little bit of reading, investing in good MFs and cashing out of lousy funds and investing into good ones from time to time isn’t difficult at all.

Residential Homes

Inflation Index for 1981 –> 100,
Inflation Index for 2009-10 -> 711 i.e. 6.75% CAGR

Real Estate is taxed @ 20% with indexation (considering inflation) or 10% without indexation.

So a property of Rs. 100 if becomes x in 20 years (1981-2010), would be taxed as if its cost price is 711 meaning the tax would be charged only on the appreciation above 711.

Because of the taxation, for real estate to match the expected MF returns, it should grow by 16.65% CAGR over 20 years.
i.e. 2 times in 4.5 years, 16 times in 15.4 years

This is when you have all the money today, in cash.

BUT

Unlike MF Systematic Investment Plans (SIP), Residential Housing is mostly bought with leverage, i.e. with a housing loan of average rate 10% which comes to 7% because of the tax benefits

So For Real Estate to match MF returns, it should grow by 16.65 + 7 = 23.65% CAGR over 20 years.
i.e. 2 times in 3.26 years, 16 times in 13 years!!

Buy real estate if you think it will be 16 times in 13 years.
i.e. the 50 lakh flat you are buying should be 1 Cr in 2013-14, or 8 Cr in 2023 !!!


Rentals

Rental income is minuscule compared to the property value. A 50 lakh (1000 sq. feet) 2 BHK flat in Pune may give you 10k at best, i.e. 1,20,000 per year.

Expenses:
Society Charges: Rs. 2 / Sq. Feet per month (Rs. 24000 per year)

Property tax: Rs. 4 / Sq feet per year (Rs. 4000 per year)

Maintenance / Repairs: Rs. 2000 per year

So Net Rental Income: 120000 – 24000 – 4000 – 2000 = 98,000 per year which is 1.96% per year which is also uncertain as flats remain unoccupied at times.

Interestingly, this rental income does not get compounded as it gets used for other expenses.

Risk

Real Estate has some inherent risks which are significantly more than equity mutual funds

1. Leverage
In Buying a home, you are on a debt of your lifetime, an Equity MF SIP is without debt.

2. Liquidity (How fast can you sell your investment and at what price when you want to) You may think Rates in a locality have risen from say 2500 to 5000 per sq. feet. But that does not mean you can sell your flat at 5000 rate. Just try it!

3. Diversification (not all eggs in one basket)

4. Price Discovery (Getting the right price in the market and not being fooled by a one off price by someone, somewhere)

5. Legalities & Possession (Eventualities like encroachment, irregular records, double selling of a single property etc)

6. Ease of dealing (Buying, selling, storage, renting and broker hassles)

Equity Risks are also great. Managing that risk is a topic in itself but most of it is being transferred to the Mutual Fund; you need to manage the rest.


The ‘Permanent source of income through rent’ argument

It is argued that a house would give me permanent source of income at retirement through rental income.

If you have 50,000 per month to invest,

Option 1:

Buy a house with a home loan at average rate of 10%. Grow it by 23.65% CAGR. Then get 2% rental yield at retirement pre tax.

Option 2:

Put that money thru a SIP in equity. Grow it by 15% CAGR. When you approach retirement, get all accumulated money slowly into debt & bank FDs and get 6 % post tax yield on your money.

No prizes for guessing which is better!

Both asset classes are co-related over a long term

If you believe Real Estate is going to grow no matter what, why do you believe so? The value of Real Estate could be thought of derived from two things.

1. The shelter it provides
2. The access to economic activity it provides

So, the second point actually gives us an idea why property in Mumbai / Pune is growing the way it is today. In the long term, if India grows at 8%, there will be tremendous economic opportunity created which in turn will make real estate costlier everywhere, more so in areas which provide better economic activity.

Enhanced economic activity in turn means growth of companies and hence growth of equity markets and also growth of jobs & salaries.

Speaking of averages, if you think equity markets may fail to give you returns over a 20 year term, don’t expect your real estate to give you returns as well. May be don’t expect your job to be there as well. And then what will happen to your home loan?

Look at Real Estate & Equity returns in USA or Japan over the last 20 years. And you will see clearly what I want to say.

Equity markets and Real Estate markets in the end are both dependent on the Indian growth story.


Conclusion


1. If you want to bet on Real Estate, understand that you are taking a BET, just like any other asset class (like stocks, bonds, Gold etc.).

2. Analyze, understand and invest. The property ought to become 2 times in 5 yrs (if you have cash) or 3.26 yrs(Loan) and 16 times in 20 yrs(cash) or 13 yrs(loan) at least!

3. Don’t over leverage. Too much loans can bring you down.

4. Treat Real Estate as any other asset class. If you wanted to buy 50 lakhs worth of stocks today, won’t you be targeting 15% CAGR over a long term? Think the same when you buy real estate.

5. Real Estate is for real, but the gains may or may not be, beware!

All this requires disciplined investment. Period. Saying that I require a ‘Home Loan Stick’ to make me save 50,000 per month, or it requires an illiquid house as an asset so that I do not sell it off like I would a mutual fund is making a fool of yourself.

Happy Investing!

P.S. I just used some basic concepts like compound interest, income tax and risk/return trade off to analyze the real estate asset class. I may be wrong and would be extremely glad if somebody points out logical errors in the argument. All figures used are approximate.

Road Trip II: Raigad Coast

In October of 2009, we planned to have a biking expedition from Pune to Alibag, Kashid and Murud which is some 160 Kms away. That time we had to cut short our trip due to an emergency and visited only Nagaon and Kashid.

What couldn’t happen in 2009, happened in 2010. I, Nilesh, Alok and Bhagyashree set out for Road Trip II. The Plan: Pune – Srivardhan – Harihareshwar – Murud – Kashid – Alibag – Pune all in 2 days !!

Check out the snaps here !

We started on the morning of January 25^th, 2010. After having a sumptuous breakfast of pohe and tea at Chandni Chowk, we set out towards Mulshi. We had decided to take the Pirangut – Mulshi – Tamhini Ghat – Nizampur – Mangaon – Morba – Mhasala – Srivardhan route. This can easily be traced through google maps. This is the shortest route into the konkan plains from Pune. After a few snaps at Mulshi Dam and maneuvering through the lonely but beautiful Tamhini ghat, we reached Morba for some tea. Tamhini ghat is extremely lonely and with no visible help of food/fuel or repairs in sight for a long time, it is advisable to cross this section only during day time.

We finally reached Srivardhan at 12:30 PM after travelling 160 Kms. We checked into a home stay for Rs. 450 a room, had some nice fish thali at a local restaurant (Prasad Vichare) and headed for Harihareshwar which is 20 Kms away. Harihareshwar has a famous temple. While the temple is a simple place, there is way through the temple to top of a hill from where you get a spectacular view of the Harihareshwar beach on one side and rocky formations on the other. We also spotted some dolphins from there! As Harihareshwar beach isn’t safe for bathing, we headed back to Srivardhan before sunset to bathe in the sea and enjoy the sunset. It’s amazing that one doesn’t get bored of the beaches how many a times you see them. As the cool sea winds started to soothe our bruised asses, we knew there’s more coming tomorrow :)

We woke up the next day to the sound of children singing patriotic songs early morning. That is when I remembered that it was Republic Day. It is this law of the land which prevails which is allowing us to make such a trip a success!

There are two ways to go from Srivardhan to Murud. One is to reach Dighi Port (20 Kms) and take a jetty to Rajapuri (20 Mins) from where you can go to Murud (another 10 Kms). This is obviously the shorter route. But because of the uncertainty of timings of the jetty, we took the longer route (totally by road) to Murud which is around 60 Kms. The road from Srivardhan to Murud was the most beautiful road in the whole trip. While the initial patches were bad, later on the road became smooth and with the sea view on the left, the bike ride was fantastic!

Murud is a long beach. While the surroundings are great, the beach suffers from deposits of black silt. I would recommend not bathing in this beach as you would get dirty in the silt as you get out of the beach. We had some refreshing lime soda at the beach and then did some beach biking! Yes, as the beach is long and the sand is stiff, you can ride a bike on this beach. After our outing, we decided to have lunch at one of the beach side restaurants. While the food there was good, the service was pathetic. We started for Kashid beach around 2 PM which is just 20 Kms away.

I was horrified looking at the crazy Mumbai-Puneites at Kashid. While the approach road was chock-a-bloc with MH 01 and MH 12 vehicles, the beach resembled something like Juhu! Inspite of the crowd, the beach was good to have our second dip in the ocean J We managed to climb up a nearby place to have a look at Kashid beach from the top and man, what a view it was! I am sure none of the general public knew about this place and we patted ourselves for how smart we were ;)

Now it was 4 PM and it was time to head back. We went towards Alibag, took the city bypass, fueled up once again and headed back at 5 PM. This time we took the Pen-Khopoli-Lonavala route as it was getting dark. While the Pen-Khopoli-Lonavala route was serene, smooth and full of natural beauty, Lonavala – Pune was an example of modern infrastructure at its best making us cruise past 70-80 Kmph to reach Pune by 8 PM. After having some nice Paratha’s at our favorite ‘Aunty’s Parathas’ in Pashan, we came back to the hostel.

It was a bike trip like I had never done before. We travelled for 483 Kms in 2 days visiting 4 beaches and covering the entire Raigad coast. Yes, we felt the pain in the ass more than once but it was all worth it!!

Acknowledgement: While I keep on hearing stories of how GPS is all so helpful in the US, in the absence of any such thing in India, I must say Google Maps has done a fantastic job for helping us plan the trip to perfection with most major towns, roads, turns and distances mentioned accurately. Our trip wouldn’t have been as easy as it was without Google maps :)