1 The New York Times on the gathering storm over right to work. Nearly a year after Wisconsin and several other Republican-dominated states curbed the power of public sector unions, lawmakers are now turning their sights toward private sector unions, setting up what is sure to be another political storm. The thunderclouds are gathering first in Indiana. The leaders of the Republican-controlled Legislature say that when the legislative session opens on Wednesday, their No. 1 priority will be to push through a business-friendly piece of legislation known as a right-to-work law. Right-to-work laws prohibit union contracts at private sector workplaces from requiring employees to pay any dues or other fees to the union. Many right-to-work supporters say it is morally wrong to force unwilling workers to contribute to unions, while opponents argue that it is wrong to allow “free riders” not to support the unions that represent them in negotiations and arbitrations. Right-to-work is also a potent political symbol that carries serious financial consequences for unions. Corporations view such laws as an important sign that a state has policies friendly to business. Labour leaders say that allowing workers to opt out of paying any money to the union that represents them weakens unions’ finances, bargaining clout and political power.
2 Paul Krugman insisting nobody understands debt, in The New York Times. When people in D.C. talk about deficits and debt, by and large they have no idea what they’re talking about — and the people who talk the most understand the least. For while debt can be a problem, the way our politicians and pundits think about debt is all wrong, and exaggerates the problem’s size. Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.
This is, however, a really bad analogy in at least two ways. First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; US debt is, to a large extent, money we owe to ourselves. It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of US claims on foreigners. And because foreigners tend to put their US investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction. So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.
3 The New York Times on IBM and its CEO until last week, Samuel Palmisano. Because it has become so consistently successful, IBM is almost boring. This is a company so predictable that its financial forecast is packaged as a “five-year road map” as if it were some sort of state planning exercise. A large portion of the credit goes to Samuel J Palmisano, who stepped down on Sunday after nearly a decade as chief executive. During his tenure, IBM has been a textbook case of how to drive change in a big company — when so much of the study of business innovation focuses on start-ups and entrepreneurs.
He says his guiding framework boils down to four questions: 1. “Why would someone spend their money with you — so what is unique about you?” 2. “Why would somebody work for you?” 3. “Why would society allow you to operate in their defined geography — their country?” 4. “And why would somebody invest their money with you?” Palmisano formulated those questions in the months after he became CEO in March 2002. The four questions, he explains, were a way to focus thinking and prod the company beyond its comfort zone and to make IBM pre-eminent again. He presented the four-question framework to the company’s top 300 managers at a meeting in early 2003. “This needs to be our mission and goal, to make IBM a great company,” he said.
4 The Guardian on Zimbabwean workers complaining of Chinese abuse. Zimbabwe’s national defence college is under construction within a sprawling, heavily-guarded compound whose brooding presence sends a clear message to any would-be revolutionary. The construction site north of Harare has also become the lightning rod for another source of simmering resentment – Chinese labour practices. Surrounded by a perimeter wall that runs for a kilometre through what was once farmland, the shadowy military academy is being built by a Chinese contractor whose managers are accused of meting out physical punishments, miserable conditions and meagre pay.
"The beatings happen very often," said a 28-year-old carpenter, wearing blue overalls as he made the long walk home after a 14-hour shift. "They ill-treat you and, if you make a mistake, they beat you up. The Zimbabweans and Chinese rarely mix, he added. "They don't speak English so we use sign language. The Chinese eat off plates, then give us the leftovers." A 26-year-old builder, on his way to a nightshift, said: "We tried to go on strike but the leader of it was beaten up and sacked. The government doesn't say anything, even though it knows people are beaten up. I saw them undress some workers and beat them with helmets. Some of them were crying with the pain. "We feel angry but we need money, so there is no choice. If you don't work 10 hours, there is no money."
China’s commercial empire has expanded enormously in Africa over the past decade and Zimbabwe is trying to catch up. Trade between the two countries stood at $550m last year, according to the Chinese embassy. The government in Harare has announced that China plans up to $10bn in investments over the next five years, more than in any other country. Diamonds and other mineral resources are the main attraction, but Chinese entrepreneurs have also seized opportunities in construction, manufacturing and retail.
5 The Guardian on a Saudi law to have only females work in lingerie stores. Saudi Arabia will begin enforcing a law that allows only females to work in lingerie and apparel stores, despite disapproval from the country's top cleric. The 2006 law banning men from working in female apparel and cosmetic stores has not been implemented up to now, partly because of view of hardliners in the religious establishment, who oppose the idea of women working where men and women congregate together. Saudi women – tired of dealing with men when buying underwear – have boycotted lingerie stores to pressure owners to employ women. Law enforcement starts on Thursday.
The kingdom's religious police enforce Saudi Arabia's strict interpretation of Islam, which prohibits unrelated men and women from mingling. Women and men in Saudi Arabia remain highly segregated and are restricted in how they are allowed to mix in public. The separation of men and women is not absolute. Women in Saudi Arabia hold high-level teaching positions in universities and work as engineers, doctors, nurses and a range of other posts.
6 The San Francisco Chronicle on a girl with a funny talent. Some people can wiggle their ears. Others can cross their eyes or whistle like a bird. And then there’s a girl named Sarah whose funny talent is especially entertaining—and unique. The 13-year-old from Sydney, Australia, can make her eyebrows dance. Sarah, whose last name and back story are unknown, posted a video of herself performing impressive eyebrow dance moves to music last week and became an Internet sensation in a matter of days. Her YouTube video, “Girl with a Funny Talent,” has been viewed more than 7 million times.
7 The San Francisco Chronicle on Japan’s ‘mancession’. Three times a week, Seiya Ogawa bikes to an unemployment center in Kadoma, home to Panasonic Corp., looking for work to help pay for his son's final year at college. "At this point, I'm willing to take any job," said the 49-year-old, who assembled electronic circuit boards in what was once a bustling manufacturing suburb of Osaka, Japan's third-largest city. This month, it's officially one year since he first signed on at the center, and "it's like my humanity's been stripped from me," he said.
Ogawa and his son rely on the incomes of his wife and daughter, a social role reversal that is spreading in Japan as factories and building companies fire workers and services that hire mostly women add employees. The increasing burden as breadwinners also gives women less incentive to marry and have children early in a country that already has the fastest-aging population in the developed world.
8 The BBC on Saudi Arabia’s huge budget surplus. Saudi Arabia has posted an $81.6bn budget surplus for 2011 as its income beat forecasts by more than double, official figures suggest. Revenues grew to $296bn, although ministers had forecast $144bn, said the Saudi Arabian finance ministry. The country plans to reduce spending in 2012 to $184bn after officials said they expect the surplus fall to just $3bn next year. Analysts however, see this as another conservative forecast. Most of the growth in revenue was driven by oil production which accounts for around 90% of the country's exports.
9 The BBC on Nikkei being at its lowest year-end level since 1982. Japan's main share index has closed at its lowest end-of-year level since 1982. The Nikkei 225 index finished last Friday up 0.7% to 8,455.35. Stocks have been hit by a weak global economy, as well as a devastating earthquake and tsunami on 16 March that left 20,000 people dead or missing and sparked a nuclear crisis. Shares have lost a fifth of their value this year, with the majority of losses in the two days following the disaster. The disaster severely disrupted manufacturing at carmakers such as Toyota and electronics firms such as Sony. Shares in Tepco, the owner of the Fukushima nuclear power plant that became the focus of an effort to prevent a meltdown, dropped 91% this year.
10 The Johannesburg Times on an Afghan girl rescued from torture by her in-laws and likely to be sent to India for treatment. An Afghan official says a 15-year-old girl severely tortured for months by her in-laws who wanted to force her into prostitution will be sent to India for medical treatment. Interior Ministry spokesman Sediq Sediqi said Sahar Gul's mother-in-law and sister-in-law were arrested and her husband was being sought. Gul was brutally tortured, beaten and locked in a toilet by her husband’s family for months after she refused to become a prostitute. She was in critical condition when she was rescued from a house in northern Baghlan province last week, after her neighbours reported hearing Gul crying and moaning in pain. According to police in Baghlan, her in-laws pulled out her nails and hair, and locked her in a dark basement bathroom for about five months, with barely enough food and water to survive.
11 Khaleej Times on India being a junk-mail country. India has emerged as the world’s top source of junk mail as spammers make use of lax laws and absent enforcement to turn the country into a centre of unsolicited email. A recent report by Kaspersky Lab, a Moscow-based global Internet security firm, says more spam was sent from the south Asian giant than anywhere else in the world in the third quarter of the year. An average of 79.8% of email traffic in the three months to the end of September was junk. Of that, 14.8% originated in India, 10.6% came from Indonesia, and 9.7% from Brazil. Vijay Mukhi, an Internet security specialist in India’s financial capital, Mumbai, said spammers, forced to look for new bases after other countries cracked down on the practice, can act with impunity in India. ‘We have an Information Technology Act that was introduced in 2000. But we don’t have any convictions under it and it’s silent on spam,’ he told AFP. ‘If I’m a spammer, I would rather spam from India to India and the rest of world because nothing will happen to me.’ India’s booming mobile phone sector, which has recently seen the introduction of third-generation smart phones, also provides a potential open door for spam and malware (malicious software), industry figures say.
12 The Dawn on a Muslim revolt in China after a mosque was torn down. Hundreds of Muslims fought with armed police who demolished a mosque in north China, local police and a human rights group said on Monday, with several people injured in the “riot”. The violence between local Muslims and roughly 1,000 armed police began after police declared illegal a newly renovated mosque in the Ningxia Hui Autonomous Region and moved to destroy it, the Information Center for Human Rights and Democracy, in Hong Kong, said. The Hui are one of several Muslim minority groups in China. A policeman surnamed Ma confirmed that the mosque was torn down. He told AFP a “riot” occurred in Hexi on Saturday afternoon.
13 The Wall Street Journal on power problems threatening India’s growth. Almost a decade ago, India's government, seeking to overcome one of the biggest challenges to the nation's development, set an ambitious goal: electric power for all by 2012. Instead, as the target date of March nears, the power sector is in shambles, and its dire state threatens India's economic prospects at a time when a high inflation rate, a burgeoning government budget deficit and ripples from the European financial crisis are already damping growth. India is the world's fifth-largest electricity producer after the US, China, Japan and Russia, but its per capita consumption is among the world's lowest, at 778.71 kilowatt hours a year. Almost 300 million people don't have access to electricity. The country needs a huge jump in supply to sustain its rapid economic growth, fight poverty and light the homes of those powerless millions.
More than half of India's installed electricity-generating capacity of 182 gigawatts is coal-based, and a large chunk of future power projects also will run on coal. By comparison, China's installed capacity at the end of 2010 was 962 gigawatts, about 73% of it from coal. India's coal sector is hampered by primitive mining techniques and rife with theft and corruption; the monopoly coal producer, state-controlled Coal India, has consistently missed production targets. Shoddy transport infrastructure, inadequate for moving coal from far-flung mines to where it is needed, compounds the problems. "The situation is extremely challenging considering the fact that billions of dollars have been invested in building power plants but they can't be used to produce power due to non-availability of coal," said Ravi Sharma, chief executive of Adani Power.
14 Stephen Roach holding forth in The Financial Express on why India is riskier than China. Today, fears are growing that China and India are about to be the next victims of the ongoing global economic carnage. This would have enormous consequences. Asia’s developing and newly industrialized economies grew at an 8.5% average annual rate over 2010-11 -- nearly triple the 3% growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession. In one important sense, these concerns are understandable: both economies depend heavily on the broader global climate. China is sensitive to downside risks to external demand -- more relevant than ever since crisis-torn Europe and the US collectively accounted for 38% of total exports in 2010. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets. Yet fears of hard landings for both economies are overblown, especially regarding China.
It is a serious exaggeration to claim, as many do today, that the Chinese economy is one massive real estate bubble. Yes, total fixed investment is approaching an unprecedented 50% of GDP, but residential and non-residential real estate, combined, accounts for only 15-20% of that -- no more than 10% of the overall economy. In terms of floor space, residential construction accounts for half of China’s real estate investment. Identifying the share of residential real estate that goes to private developers in the dozen or so first-tier cities suggests that less than 1% of GDP would be at risk in the event of a housing market collapse -- not exactly a recipe for a hard landing.
India is more problematic. As the only economy in Asia with a current account deficit, its external funding problems can hardly be taken lightly. Like China, India’s economic growth momentum is ebbing. But unlike China, the downshift is more pronounced -- GDP growth fell through the 7% threshold in the third calendar year quarter of 2011, and annual industrial output actually fell by 5.1% in October. But the real problem is that, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means that the Reserve Bank of India can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of around 9% of GDP limits India’s fiscal-policy discretion. While China is in better shape than India, neither economy is likely to implode on its own. It would take another shock to trigger a hard landing in Asia.
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