1 Simon Zadek’s warning in The Guardian that 2012 will be unreasonably difficult. The sustainable business circle's golden rule is to keep one's chin up, point out the good news, and duck the hard questions by appealing to an unknowable future. Penning positive sustainability predications for 2012 on the same day that Christine Lagarde, managing director of the International Monetary Fund, warned of a 1930s style meltdown in the global economy, is challenging. The implications of China's imploding property boom does not improve my state of mind. That the City instructed David Cameron to either secure their interests in Europe or turn out the lights provides an expected, but ugly, backdrop. And all that in the context of the fall in the share of US working citizens in their own GDP, down to an historic 58%, which bodes badly for our cherished north Atlantic ways.
As predictions go, one cannot go far wrong in saying that 2012 is going to be ghastly for, quite literally, hundreds of millions of people. Noah's biblical story spells out the fate of unreasonable folks. Noah attempted repeatedly to warn his neighbors of the coming deluge, but was ignored or mocked. For 2012, I hereby open the unreasonable list with three unreasonable ambitions. Firstly, Rio+20 could be a moment for some of the world's largest businesses, to initiate their own sustainability marshal plan to deliver the benefits many nations are failing to achieve.
Secondly, we could commit at Davos and then at the G20 in Mexico to ridding the world of the US$1 trillion worth of tax financed, fossil fuel subsidies that in effect place a negative price on carbon today. And, thirdly, it is time to confront the financial sector. Predictions for next year, left to their own devices, look pretty bleak. So my wish is that we declare 2012 the year of the unreasonable, establish an unreasonable list and set ourselves some ridiculously ambitious goals.
2 The Guardian on UK’s low income families having to choose between cutting spending on food to pay rent and moving out of homes. A further 800,000 homes will be put out of reach of people on housing benefit because of government welfare cuts – leaving low income families the choice of cutting spending on food to pay the rent or moving out, according to a study by housing experts. The Chartered Institute of Housing has found there will be thousands more claimants than properties that are affordable on benefits alone, raising the possibility that the poor will migrate to "benefit ghettoes" in seaside towns or the north of England.
3 The BBC wondering whether there has been a subversion of Indian democracy. Are India's politicians serious about cleaning up public life? After last Thursday night's debacle in the upper house of the parliament, many believe they aren't. Many commentators believe that the chaos leading to the adjournment of the anti-corruption Lokpal bill was orchestrated by the ruling party, something opposition parties have also alleged. How else did news channels begin predicting that an MP at the debate - ahead of the still-born vote - would actually trigger off chaos at least an hour before he actually did so? Did some of the speakers at the debate filibuster so that it would be extended up to midnight and the session would come to an end without the voting?
Whatever the truth, Thursday night was one the darkest nights in the chequered history of India's democracy. It is now becoming increasingly clear that the Lokpal bill would not have passed muster in the upper house as the Congress party did not have the number of votes needed to pass the key bill. The Congress party, however, says that the opposition burdened them with nearly 200 amendments which would have taken a lot of time to debate, and they simply ran out of time. But what is clear, say analysts, is that India's politicians stand discredited - again - in the eyes of the people.
4 Ben Trovato writing in The Johannesburg Times, that media ought to predict, not give highlights of the year gone by. Every time I pick up a newspaper or turn on the TV I am confronted by a special report on the highlights of the year gone by. Quite frankly, I have had enough of it. For a start, we know what happened in 2011. We were here the whole time. And there were no highlights. Have our memory banks been robbed by alcohol and drugs to such an extent that we can't remember being mugged by Bryce Lawrence at the Rugby World Cup or that the climate change conference changed nothing at all and, more importantly, that white girls can still be crowned Miss South Africa? Tell us stuff we don't know.
5 The Dawn on the plight of Pakistan’s 1.2m street children. One of Pakistan’s major social anomalies is its 1.2 million and growing street children. A prime responsibility of the State and society, these children are instead neglected to the point of being driven to begging, drug trafficking and scavenging around rubbish dumps, many survive by prostituting themselves and stealing. Hungry, alone and afraid; they are robbed off their innocence and in turn are given sexually transmitted diseases, tuberculosis, jaundice and liver or kidney disorders. Mostly due to the appalling treatment on the streets, they find refuge with criminal gangs and militant groups who promise protection and food.
6 Naomi Wolf writing in The Khaleej Times about the Streets of 2012. What does the new year hold for the global wave of protest that erupted in 2011? The answers are alarming but quite predictable: we are likely to see much greater centralisation of top-down suppression – and a rash of laws around the developed and developing world that restrict human rights. But we are also likely to see significant grassroots reaction.
What we are witnessing in the drama of increasingly globalised protest and repression is the subplot that many cheerleaders for neoliberal globalisation never addressed: the power of globalised capital to wreak havoc with the authority of democratically elected governments.
Not only are laws criminalising previously legal dissent, organising, and reporting being replicated in advanced democracies; so are violent tactics against protesters. Overwhelmingly, people want simple democracy and economic self-determination. That agenda is in direct conflict with the interests of global capital and governments that have grown accustomed to operating without citizen oversight. It is a conflict that can be expected to heighten dramatically in 2012, as protesters’ agendas – from Occupy Wall Street to Occupy Moscow – gain further coherence. Much is at stake. Depending on the outcome, the world will come to look either more like China – open for business, but closed for dissent – or more like Denmark.
7 The Wall Street Journal on India loosening rules for foreign investors. India's federal government on Sunday moved to allow qualified foreign investors to invest directly in local share markets, in yet another move aimed at attracting foreign capital flows amid a shaky global economy. Qualified foreign investors, or QFIs, will now be able to invest individually up to 5% of the capital of the Indian company. Cumulatively, QFIs can invest up to 10% of the capital of the company being invested in. The new rule will be effective Jan 15. Previously, only foreign institutional investors and non-resident Indians were allowed to directly invest in local shares.
8 The Wall Street Journal urging Indians to get out and protest for economic renewal. The end of 2011 witnessed a political establishment fixated on debating a new anticorruption bill thrust upon it by activist Anna Hazare and his team. This caps a year in which political debate and discussion were focused on corruption and concerns about repatriating black money abroad. While these dramas were unfolding, eating up policymakers’ time, no one much bothered with the economy. Partly because the body politic was so distracted, there are now potentially much more damaging economic costs that the country may have to bear in the coming years.
To put it sharply: Can India afford another year of wasted parliamentary sessions? Could a thriving economy exist in a country with a dysfunctional political system? It might be possible for a rich country with a well-functioning bureaucracy, and good laws, regulations and institutions in place to do well even in a climate of political gridlock and policy paralysis. A few years ago, for example, Belgium didn’t even have a government for about a year but the Belgian economy did alright just the same. But the situation in India is very different from rich countries which can function more or less on autopilot. This past year of policy paralysis in India might not have been so bad if the overall economic picture had been bright.
Consider the broad macroeconomic picture. Economic growth has fallen to below 7%. What is worse, it’s not forecasted to be much better next year. Double digit growth is a distant mirage that no one is even talking about anymore. Coupled with this is an Indian rupee apparently in free fall. Asia’s worst performing currency, it has weakened to more than 50 rupees to the dollar in recent weeks. This combination of macroeconomic woes is why Wells Fargo in a recent report said that the Indian economy is “still deteriorating at the margin.”
A few weeks ago, Kiran Bedi, a leading member of Team Anna, made the odd assertion that a speedy passage of the Lokpal would boost the Sensex, the country’s principal stock index. What would be sensible to say instead is that righting the economic ship would be the best thing that could happen, not just for the Sensex, but for all Indians rich and poor.
9 Columbia University professor Arvind Panagariya’s attempt to crack the Kerala myth in The Times of India. That Kerala has the best indicators of health and education outcomes among all Indian states and enjoys a low rate of poverty is beyond question. Because the communist and other left-of-centre governments have ruled Kerala for the better part of its post-Independence history, analysts routinely attribute its superior achievements to the high priority these governments have allegedly assigned to equity and related social goals over time. Yet, like all conventional wisdom, this too must be subjected to careful empirical scrutiny and, if need be, challenged. Begin with equity. Going by the latest available calculations, Kerala had the highest rural and urban inequality among the largest 15 (by population) Indian states in 2004-05. High inequality means that, contrary to claims by many, Kerala could not have achieved the decline in poverty without significant increases in income. Given Punjab and Haryana had enjoyed higher per capita expenditures than Kerala in 1983, this fact points to faster growth in per capita expenditures in the latter than the former. Poverty levels in urban and rural Kerala have, thus, fallen not because its left-of-centre governments promoted equity but because per capita expenditures rose rapidly, thanks in large part to inflows of remittances.
Can we find compelling evidence of successful public sector interventions in education and health as the source of sustained high levels of education and health in Kerala? The answer to even this question is in the negative. Consider health first. Kerala has ranked first or second in per capita public expenditures on health since 1991-92. But this observation masks two facts. One, these expenditures have hovered around a bare 1% of GSDP. Two, and much more importantly, private expenditures on health dwarf public expenditures in Kerala: in 2004-05, the latest year for which we have data, whereas public expenditures amounted to just 0.9% of GSDP, private expenditures were a gigantic 8.2%. The corresponding Indiawide figures were 0.9 and 3.6% of GDP, respectively.
This same pattern is observed in education. According to NGO Pratham’s latest report ASER 2010, excluding two or three tiny north-eastern states, at 53% Kerala has the highest proportion of students between ages 7 and 16 in private schools in rural India. The corresponding figure for the nearest rival, Haryana, is barely 40%. No matter how we look at it, the conventional and dominant story of Kerala as a state-led success crumbles in the face of hard facts.
10 The Times of India on Jet Airways cutting trainee co-pilots’ salaries by 60%. India's largest private airline Jet Airways has reduced the monthly salary of its trainee co-pilots by almost 60% from about Rs 130,000 to Rs 50,000 in the New Year. The decision was conveyed to its trainee co-pilots last week and is among a series of steps that the airline is taking to cut costs and survive the life-threatening phase that Indian carriers are passing through due to a mix of high operating cost environment at home and a slowing down economy.
11 The Economic Times on Andhra Pradesh government spending Rs 20bn to open supermarkets in the state, and seeking partnerships with Metro AG and Walmart for creating a hybrid retail model that combines the best attributes of the public and private sectors.
12 Business Line on guar gum being the golden commodity of 2011. In 2011, stock markets failed to shine and gold lost a bit of its lustre, though the latter ended with a 31% gain. So, which was the commodity that gave the best returns last year? The winner is guar gum, a by-product of guar seed derived from guar or cluster beans. Prices of guar gum increased over two-and-a-half times in 2011 and Rs 100 invested in the product on January 1 last year would have fetched an additional Rs 254.60 on December 31. Smart investors would have got Rs 22 more had they sold on December 28. Between January 2 and December 31, its price increased to Rs 22,568 a quintal from Rs 6,364.
12 The Mint on the long and short of India in 2012. The New Year is here, but it isn’t a happy one. It should have felt like the beginning of something new, but it feels, instead, like the end of all that might have been. And so, 2012 doesn’t look like it will be a good year for India. Europe is a financial mess, the Arab world is in ferment, and the Occupy movement is gaining ground in the US.
The details paint a picture of gloom. India has many problems—financial, political, geopolitical and social—but the most significant challenge it faces has to do with leadership. The curse of bad leadership isn’t limited to politics. It extends to popular movements such as India Against Corruption’s campaign. And so, even as those in power continue to build a strong case, with their actions and non-actions, on why they should not be in power, there are no alternatives to be found, either among the opposition parties or outside the political mainstream. The only sliver of hope, is that there is an almost universal disenchantment with the current crop of leaders among young people in big cities. This is unlikely to result in any major and immediate electoral upsets, but the feeling could, over the next three, five or 10 years, travel to other cities, towns, even villages, effecting a change in the profile of candidates who stand for elections and the reasons why people vote for them. If that happens—and it is a long shot—then it should make up for all the pain this country will go through in the next year or two.
Wish you a wonderful New Year.
Love
Joe
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