Thursday, May 31, 2012

How Indians can save India -- at a price; Facing down the bankers; Big US law firm collapses; Sherpa syndrome; Hong Kong, US most competitive

1 How Indians can save India – at a price (The Wall Street Journal) What's the price of Indian patriotism? Some government officials and advisers say the large population of overseas Indians could be the answer to the country's current-account and currency mess. The idea is that non-resident Indians, or NRIs, would be keen to buy Indian government bonds in dollars or euros. The sweetener is that the central bank would bear the foreign-exchange risk. Barclays Capital estimates a bond sale could bring in as much as $15 billion. That would help offset India's projected current-account deficit for this fiscal year of nearly $70 billion.

NRI money is already crucial. Remittances were $17 billion in the December-ended quarter, equivalent to 36% of India's trade deficit. The fund is also seen as stickier than other sources of overseas funds partly because of the strong ties some NRIs keep with their homeland. It helps that banks in India offer higher deposit rates on accounts for overseas Indians who save for families back home. New Delhi has sold bonds to NRIs before. In 1998, it raised $4 billion through five-year bonds yielding 7.5% sold to non-resident Indians. Then in 2000, it offered a special deposit program for NRIs with an interest rate of 8.5% that netted $5.2 billion.

The RBI hasn't ruled out another NRI bond. But it could be costlier this time. Standard & Poor's last month downgraded Indian debt because of large deficits in the government's budget and the current account. That will test the loyalty of NRIs. With other overseas investors shunning India, patriotism could be the last resort.

2 New York to ban big size sugary drinks (The New York Times) New York City plans to enact a far-reaching ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, in the most ambitious effort yet by the Bloomberg administration to combat rising obesity. The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas. The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March.

''Obesity is a nationwide problem, and all over the US, public health officials are wringing their hands saying, 'Oh, this is terrible,'" Mayor Michael Bloomberg said in an interview. ''New York City is not about wringing your hands; it's about doing something," he said. "I think that's what the public wants the mayor to do." ''The New York City health department's unhealthy obsession with attacking soft drinks is again pushing them over the top," the industry spokesman, Stefan Friedman, said. "It's time for serious health professionals to move on and seek solutions that are going to actually curb obesity. These zealous proposals just distract from the hard work that needs to be done on this front."

3 Facing down the bankers (The New York Times) Dennis M. Kelleher, one of the most powerful lobbyists on financial regulatory reform looks every bit the corporate lawyer and high-ranking Senate aide he formerly was: tailored suit, quick smile, assertive tone. But Mr. Kelleher does not work for banks. He works against them. “What is at stake is whether the American people are at risk of another Great Depression,” Mr. Kelleher, 54, said in a recent interview. “We exist to fight back against the forces trying to make us forget just how bad it was.”

Mr. Kelleher is the president of Better Markets, a nonprofit organization that pushes for a stringent interpretation of the Dodd-Frank financial regulatory law, which passed in 2010 but whose specific rules and regulations are currently the focus of an intense, complex and expensive behind-the-scenes battle. Think of Better Markets as Occupy Wall Street’s suit-wearing cousin.

Better Markets does not march against banks, or bring loudspeakers to their lobbies. It instead writes detailed comment letters to regulators, meets with them, files friend-of-the-court briefs, puts out studies and testifies before Congress. Since JPMorgan Chase announced that it had lost $2 billion or more on a failed hedge, Mr. Kelleher has made an effort to be everywhere: in its crisis, he saw his opportunity to stress that banks need tougher controls.

4 India’s Anand remains king of world chess (The Guardian) Viswanathan "Vishy" Anand, the Indian-born world chess champion, retained his crown when he narrowly beat Boris Gelfand in a series of rapid-play games in Moscow. Anand has been world champion since 2007, and this is his third successive title defence. "I simply hung on for dear life," said the urbane Anand after the match. "It just comes down to nerves in the end. The only feeling I have right now is relief. I feel too tense to be happy." At 42 and with a host of immensely talented twenty-somethings snapping at his heels, Anand is unlikely to hold the crown for many more years, but his place in chess history is now secure.

A key part of his legacy is that he has inspired a chess boom in India, where tens of millions followed the match online. "Congratulations to both players," said Russian grandmaster Peter Svidler as the match, played at the Tretyakov art gallery in Moscow, ended. Gelfand, who was born in Minsk but emigrated to Israel in 1998, admitted afterwards that time trouble had been a perpetual problem, denying him the opportunity to exploit several promising positions. Also a veteran at 43, this is likely to be his only crack at winning the crown, and he looked exhausted at the post-match press conference. He said he hoped his achievement in reaching the final would encourage the Israeli authorities to give greater recognition to chess.

5 Big US law firm collapses (BBC) Dewey & LeBoeuf is set to become the biggest law firm to collapse in the US. The firm filed for chapter 11 bankruptcy protection and said it plans to liquidate its business after failing to find a merger partner. It was hit by the economic downturn, having promised large guaranteed payments to some of its lawyers. It ran out of cash earlier in the year, which led to the immediate resignation of the majority of its partners. Dewey & Leboeuf was formed in 2007 by the merger of Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, which left it with more than 1,300 lawyers in 12 countries. It has now reduced that to 150 employees, who will wind down the business.

6 UN’s most serious cyber warning (Khaleej Times) A United Nations agency charged with helping member nations secure their national infrastructures plans to issue a sharp warning about the risk of the Flame virus that was recently discovered in Iran and other parts of the Middle East. “This is the most serious (cyber) warning we have ever put out,” said Marco Obiso, cyber security coordinator for the United Nation’s Geneva-based International Telecommunications Union.

The confidential warning will tell member nations that the Flame virus is a dangerous espionage tool that could potentially be used to attack critical infrastructure, he said. Evidence suggest that the virus, dubbed Flame, may have been built on behalf of the same nation or nations that commissioned the Stuxnet worm that attacked Iran’s nuclear programme in 2010, according to Kaspersky Lab, the Russian cyber security software maker that took credit for discovering the infections.

7 Kashmir tourism on a high (Khaleej Times) It’s another summer of peace for Jammu and Kashmir and tourists are flocking like never before to this picturesque land of meadows, streams and hills that was deserted just two years ago as tension reigned and bullets flew. Visitors in their thousands are pouring in each day - galvanising the tourism industry and bringing smiles to the faces of thousands of craftspersons, hotel owners, restaurateurs, shikara ‘wallahs’ and the like. In this summer capital, there are simply no rooms to be had. All houseboats on the Dal and Nigeen lakes, hotels and guesthouses are booked to capacity.

“There is simply no place anywhere in the Boulevard Road area, which is the famous haunt of the tourists coming to Kashmir each year. Many locals are now converting their residential homes into paying guest facilities,” said Gowhar Maqbool, a hotel owner. Long queues of tourists are seen outside Srinagar’s many Mughal gardens with people waiting for entry tickets to enter the Nishat, Shalimar and Chashma Shahi gardens.

8 School pregnancies worry SA (Johannesburg Times) The number of primary school girls getting pregnant has soared in the past few years. A report compiled by the Department of Basic Education details a litany of negative circumstances under which children are expected to complete their schooling: In Grade 3 alone, about 109 pupils fell pregnant in 2009 - as against "only" 17 in the same grade in 2008. In Grade 4, the number increased to 107 from 69 in 2008, and in Grade 5 297 girls fell pregnant in 2009. The highest concentration of pregnant pupils was in high schools, from Grade 7 to Grade 9. In 2009, a total of 45,276 girls became pregnant.

9 The Sherpa syndrome (Javed Naqvi in Dawn) there are several ways to glean facts from a news story that can put an entirely new focus on a narrative. Last week I read a story, with an unintended gem of a fact thrown in casually. A 24-year-old Israeli mountaineer who was close to becoming the youngest representative of his country to climb Everest had abandoned his plan on the last lap to rescue a stranded Turkish friend. The beautiful story would tug at the heartstrings of anyone who feels for amazing human gestures. Had the stranded friend been a Palestinian, would the story be more poignant?

A line in The Jerusalem Post report interrupted my reverie. “Lifting Irmak over his shoulders, Ben-Yehuda carried his Turkish-New Yorker friend alongside his Sherpa guide for about eight hours back down to Camp IV. Brave act indeed, but everybody in the story had a name except the Sherpa. In such stories everyone becomes a hero in the end except the ubiquitous Sherpa, who is always there in the background as part of the logistical paraphernalia, not someone who makes the summit in his own right.

This Sherpa syndrome is a more widespread phenomenon, though. In its many avatars it turns Kipling’s romance with the White Man’s Burden on its head. Instead of being rendered civilised it is the native’s turn to literally carry the responsibility of delivering fame and fortune to his new-found patron saint, who may be of a different ethnicity. India Gate in New Delhi is a grand memorial to the many natives who died while fighting for their British patrons in Afghanistan. Bob Marley sang ‘Buffalo Soldier’ to underscore the plight of segregated black soldiers who were not even allowed gallantry awards although they fought for their masters. 1

10 Hong Kong, US most competitive (Straits Times) Singapore has dropped one place in an important global competitiveness study, coming in fourth, behind Hong Kong, the United States and Switzerland. The Republic's ranking in the IMD World Competitiveness study was dragged down by fast-rising prices, a slowing economy and falling productivity.

11 Great Indian hair auction (The Wall Street Journal) Srinivasa deals with 900 kilograms of human hair a day. He is in charge of the collection, categorization and sale of hair shaved from the heads of pilgrims at Sri Venkateswara Temple in Tirumala, Andhra Pradesh. At the start of June, Srinivasa, who is an engineer by training, will oversee a third e-auction of tresses. He expects it will raise millions of rupees for the temple thanks to huge international demand for Indian hair, which is used to make wigs and hair extensions. According to their scriptures, Hindus should shave their heads at least once during their lifetime. Doing so is variously regarded as a way of shedding the ego, ridding oneself of sin and making a vow to the gods.

There are 500 barbers who work on rotation at the Kalyana Katta building, located to the west of the main Venkateswara Temple, and 16 other smaller locations in the town. The Tirumala Tirupati Devasthanam [the temple’s governing body] says revenue from the sale of hair generated 200 million rupees ($3.6 million) last financial year, up from 54 million rupees the previous year. The increase is attributed to the introduction of the e-auction, which has replaced traditional open bidding. India exported $190 million-worth of hair and related hair products in 2009-10 and could more than double that to $470 million by 2013-14, the Department for Commerce and Industry says.

Wednesday, May 30, 2012

Global implications as India slows; Spanish scare sinks euro; South Africa's jobs challenge; Mixing milk and sewage water in India; 'Desperate housewives' syndrome

1 India economy slows, with global implications (The New York Times) India's coalition government just celebrated the third anniversary of its tenure with a self-congratulatory banquet that could not have been more poorly timed: India's currency, the rupee, is falling; investment is down; inflation is rising; and deficits are eating away at government coffers. India's problems have dampened hopes that it, along with China and other non-Western economies, might help revive the global economy, as happened after the 2008 financial crisis. Instead, India is now facing a political reckoning, as the country's elected leaders must address difficult, politically unpopular decisions -- or risk even deeper problems.
"When India was being run comparatively well in 2008, they seemed to cope with these external shocks" said Glenn Levine, a senior economist at Moody's Analytics in Sydney, Australia. "I think people are starting to question the long-term Indian story. That is the difference now." India's economy is still expanding, with growth projected at about 7% this year. But the slowdown has punctured the once-bubbly mood in the business and political classes and brought sharp criticism of the government.
Indian business leaders, foreign investors and analysts say India's strengths are being undermined by growing political dysfunction. India is desperate for investment in mining, roads, ports, urban housing and other areas, but Indian businesses and foreign investors are starting to shy away. Indian corporations, unable to obtain governmental licenses or permissions for projects, are investing overseas instead. Foreigners also are pulling back; their investment in Indian stocks and bonds totalled only $16 billion in the last fiscal year, compared with $30 billion the year before.

2 Young and global need not apply in Japan (The New York Times) Notoriously insular, corporate Japan has long been wary of embracing Western-educated compatriots who return home. But critics say the reluctance to tap the international experience of these young people is a growing problem for Japan as some of its major industries lose ground in an increasingly global economy. Discouraged by their career prospects if they study abroad, even at elite universities, a shrinking portion of Japanese college students is seeking higher education in the West. At the same time, Japan’s regional rivals, including China, South Korea and India, are sending increasing numbers of students overseas — many of whom, upon graduation, are snapped up by companies back home for their skills, contacts and global outlooks.

3 Facebook stock loss over 24% (San Francisco Chronicle) Facebook shares fell to a new low, extending losses from the worst-performing large initial public offering during the past decade to more than 24%. The stock fell 9.6% to $28.84 in New York, below the prior low of $30.94 on May 22. Facebook began trading May 18 after underwriters sold shares at $38. About $25 billion in market value has been erased from Facebook as bearish sentiment built in stock and options markets after the social-networking site went public while US equities headed for the biggest monthly decline since September.

"People are disillusioned," Matt McCormick, who helps oversee $6.2 billion at Bahl & Gaynor, said. He doesn't own shares of Facebook. "A lot of investors believed the hype," he said. "In this type of volatile market environment, people are not going to take chances." Facebook and Morgan Stanley, its lead underwriter, faced criticism for boosting the number of shares sold in the IPO by 25% to 421.2 million in the days before the deal. They also increased the asking price to $34 to $38 from $28 to $35.

4 At RIM, hints of loss, 5,000 layoffs (San Francisco Chronicle) Struggling BlackBerry maker Research In Motion warned that it will have an operating loss in its current March-to-June quarter and said there will be significant layoffs this year. Ontario-based RIM, a pioneer in the smart-phone market, made no mention of a sale of the company, but new chief executive Thorsten Heins did not rule it out after RIM's last earnings were released in late March. "It's a disaster, it's bad," Jefferies analyst Peter Misek said. "The problem is you can't see a path to a sale until you stabilize the business." Misek said if the advisers weren't brought in to consider a sale originally they are likely considering it now. Misek expects RIM to announce as many as 5,000 layoffs soon.

5 Spanish scare sinks euro (The Guardian) The euro sank to a near two-year low against the dollar on Tuesday amid worries about the solvency of Spanish banks, and as the governor of the country's central bank quit. The single currency fell below $1.25 after rating agency Egan-Jones cut the country's credit rating. Against the pound it was worth 79.95p. Spain's borrowing costs are near euro-era records amid worries about when the country will recover from its second recession in three years and start cutting its 24% unemployment rate.

6 South Africa’s jobs challenge (Johannesburg Times) If South Africa wants to meet the National Development Plan's aggressive targets of reducing unemployment from 27% to 6% by 2030, 11 million more jobs must be created. Additionally, the proportion of adults working in rural areas must rise from the present 29% to 40%.

7 Mixing milk and sewage water in India (Dawn) Indian police said they had arrested and charged four men in Mumbai who are accused of selling milk mixed with sewage water in plastic packets scavenged from garbage bins. The four vendors are suspected of adulterating milk for the last six months and are accused of putting their customers’ health at risk by selling it in a western suburb of the city. Police said one of the vendors’ methods was to rummage through garbage bins and collect empty milk packets, which they would fill with 60% milk and 40% gutter water, before sealing the packet with a burning candle.

The raid comes after a meeting of Indian dairy farmers this month called for strong legislation to curb the malpractice of adulterated milk being sold to consumers. The sale of fake products in branded packaging collected from rubbish dumps is believed to be widespread in India. In 2010, police busted a gang in New Delhi believed to be making thousands of dollars a month by selling local Indian whiskey in the bottles of premium brands such as Johnnie Walker and Glenfiddich.

8 ‘Desperate housewives syndrome’ in Australia (The Age) Australian women are succumbing to "Desperate Housewives Syndrome," an eating disorder in middle-age, driven by the desire to look as thin as the celebrity stars of shows such as Desperate Housewives. There's been an increase in the number of women experiencing eating disorders in middle age according to Professor Phillipa Hay, Foundation Chair of Mental Health at the University of Western Sydney. Hay says a rise in body image and weight and shape concerns is to blame. "There may be more pressures on older women to retain the appearance of youth," she says and "there may be more pressures to be a 'super woman' – successful in the workplace and at home and 'looking good' as well."

9 India rupee fall isn’t a shock absorber (The Wall Street Journal) The silver lining of India’s rupee falling 20% against the dollar over the past nine months is that it should make Indian industry more competitive. Not so fast, says Eswar Prasad, professor at Cornell University, and former official with the International Monetary Fund. He doesn’t think it will work in India’s case. “The rupee isn’t able to act as a shock absorber like in an economy with a strong, vibrant manufacturing sector,” he says. “Unless the domestic policy environment shifts, it’s not going to help. The domestically oriented ducks need to line up before focusing on external reforms.”

A falling currency normally is seen as a “shock absorber” for a weak economy. Currency devaluations after the Asian financial crisis in the late 1990s were key factors in eventually igniting growth in Thailand, South Korea and Indonesia. It’s a tool many in Greece wish they had instead of being tied to the euro.  Mr. Prasad says a weak currency isn’t enough on its own, however. You need the infrastructure, policy reform and know-how to exploit the weak currency. Government policymaking needs to be conducive to new investments.

10 Arvind Panagariya writing in The Economic Times on how one man, PH Kurien, issued the first compulsory licence in India to Natco to manufacture the drug Naxevar. That one decision brought the price of the drug down from Rs 2,80,428 at which Bayer was selling it, to a mere Rs 8,800. The intro of the story goes: It is said that only God and a few good men and women run India. One such is PH Kurien. (I’ve enjoyed interacting with Kurien when he was heading the Kerala Financial Corporation, and also during his stint with the District Primary Education Programme, and can vouch for what Panagariya says.)

Monday, May 28, 2012

Made in China, assembled in Bulgaria; Facebook phone next year; Gathering storm against Modi; Rio and a trash dump; Poetry of the Taliban

1 Made in China, assembled in Bulgaria (The New York Times0 Late in 2009, Great Wall Motor started talks with a potential Bulgarian partner for construction of an assembly plant, its first in Europe, on abandoned farmland near Lovech in northern Bulgaria. The plant can produce as many as 50,000 cars a year. For now, the facility assembles cars from kits manufactured and painted in China. But plans call for welding and painting shops to be added over the next few years, to accommodate the entire production cycle.

The idea behind the investment is simple: Bulgaria, the poorest member of the European Union, offers low production costs, cheap labour and a flat tax rate of 10%, the lowest in the Union. Assembled in an EU member state, Chinese cars can enter the European market without paying customs levies. Great Wall is aiming at the market for new-car buyers on a limited budget, both in Bulgaria and in the wider Union, and its price points are pitched to compete with similar models from established automakers like Fiat of Italy or Dacia of Romania.

For decades under the communists, the only cars available were Soviet-made Ladas and Moskvitches and East German Trabants. When the Iron Curtain fell, Bulgarians were hungry for Western models they had seen only on television. But in impoverished Bulgaria, few could afford new cars. To drive even an old, second-hand Mercedes or a BMW became a coveted sign of social status.

2 US alumni donations at $7.8bn in 2011 (San Francisco Chronicle) Colleges raised $7.8 billion in alumni donations last year, a 10% increase from 2010, according to the Council for Aid to Education. Competition for alumni giving has heated up, with a quarter of US colleges attracting 86% of all donations. The top five fundraisers in 2011 were Stanford, Harvard, Yale, MIT and Columbia. Stanford may enjoy an edge, given all the Silicon Valley entrepreneurs it counts as alumni.

3 Charles Taylor’s female victim speaks out (The Guardian) Black Diamond has never met Charles Taylor, but she still calls the day the former Liberian president was sentenced for crimes against humanity the happiest of her life. Taylor is expected to be sentenced for his crimes and the 30-year-old former female rebel leader who fought against him will be watching with interest. "This is the man who ruined my future," she says. "When I see him sentenced, maybe I will be able to move on."

Taylor has been convicted of crimes including murder, rape and conscripting child soldiers in neighbouring Sierra Leone, but he wreaked havoc in his own country too. More than 200,000 people were killed in Liberia’s 14-year civil war, countless girls and women were raped and much of the population was displaced. Black Diamond was 18 and a promising student when civil war broke out. She enjoyed a peaceful childhood in the north of the country where her father worked as a doctor. In one of Taylor's troops' regular raids, in April 2000, her parents were killed and Diamond was gang-raped.

After regaining consciousness after the attack, she found her way to the headquarters of Sekou Conneh, the leader of Liberians United for Reconciliation & Democracy (Lurd) and begged him to take her in. When the compound was attacked soon after she arrived, she simply grabbed an AK-47 and joined in with the fighting. Many of the women were, like her, survivors of rape by Taylor's troops and many had come to the conclusion that becoming a fighter was the best way to protect themselves against further rapes. “I am suffering today because of what Charles Taylor did. The war took everything from me: my parents, my education and my future. I want to spread the message that we must pursue peace. We must make sure that we never see another war here in Liberia.”

4 Facebook phone next year (BBC) Facebook is to launch its own smartphone by next year, reports have suggested. Facebook had recently admitted it was struggling to make money out of its growing mobile audience. The company, which recently floated on the stock market, has also just launched its own mobile app store. According to the New York Times, Facebook has hired experts who worked on the iPhone and other smartphones. It quoted a Facebook employee as saying the site's founder Mark Zuckerberg was "worried that if he doesn't create a mobile phone in the near future... Facebook will simply become an app on other mobile platforms".

5 SA rhino poaching figure at 227 (The Herald) South Africa has lost 227 rhinos to illegal hunting activities since the beginning of the year, the department of environmental affairs said on Monday. Environmental spokesman Albi Modise said 148 people had been arrested in connection with illegal rhino horns. The latest statistics indicate the Kruger National Park has lost 137 rhinos. Modise said of the 148 people arrested 131 were poachers, 10 were receivers or couriers of illegal rhino horn, six more were couriers or buyers and one person was an exporter.

6 Gathering storm against Modi (Mahesh Trivedi in Khaleej Times) A campaign against Chief Minister Narendra Modi is gathering momentum in Gujarat as the state assembly elections draw near. Modi baiters have swung into action after his known detractor Keshubhai Patel recently woke up from his slumber and gave a clarion call to people “to fight against injustice.” District-level politicians, including those from the ruling Bharatiya Janata Party (BJP), as well as leaders of different communities have flocked to Patel’s residence, urging the 82-year-old former chief minister to lead the anti-Modi brigade.

Even industrialists, allegedly being harassed by state government officials after they refused to donate to the BJP kitty, have gone and complained to the veteran leader who is planning an extensive tour of Saurashtra to mobilise the influential Patel community. Several top dissident leaders of the BJP as well as those of the newly-formed Mahagujarat Janata Party (MJP) founded by former BJP rebels also last week descended on Surat to attend the  birthday bash of former mayor and MJP leader Fakir Chauhan.

The BJP headquarters in Ahmedabad was shaken when it learnt that even top functionaries of the Rashtrya Swayamsevak Sangh and the Vishwa Hindu Parishad as also some religious leaders were present to greet Chauhan who was gifted a sword as the symbol of the dissidents’ readiness to take on Modi. The decision of Mulayam Singh Yadav’s Samajwadi Party, Sharad Pawar’s NCP and Ram Vilas Paswan’s LJP to contest the assembly polls is sure to keep Modi on tenterhooks in the days to come.

7 After rupee’s collapse, what next? (Khaleej Times) The world financial markets will now test Reserve Bank of India Governor Subbarao’s commitment/tolerance for the rupee depreciation. A quasi-sovereign SBI bond issue is all too possible. Yet the RBI has failed to defend the rupee at successive technical levels and its hard money reserves are not infinite. I do not see any turnaround in the twin deficits, FII capital inflows, FDI, ECB volumes or India’s higher sovereign risk premium. The RBI is impotent against the global FX market long term. The Indian rupee now faces a global crisis of confidence, possibly the worst since the 1998 Kargil war with Pakistan.

8 Rio and a trash dump (Straits Times) On a mountain of trash, a man takes a quick break in a sliver of shade before resuming his sorting work in Latin America's largest garbage dump hugging Rio's famed Guanabara Bay. But soon, he'll have to look for a new job. Ahead of the Rio+20 United Nations sustainable development summit next month, which will draw tens of thousands of people into the city, authorities are shutting down the 36-year-old landfill known as Gramacho. Built on a swamp, it swallows up 70% of the garbage produced by this huge metropolis of 11.8 million people. But the ground is unstable and shakes under the weight of the trucks that rumble through.

9 Poetry of the Taliban (Dawn) Poetry of the Taliban” is no Divan-e-Hafiz. Yet this is a book that will outlive the Afghan war. It will pose a serious challenge to US efforts to depict the Taliban as wild warriors not worthy of any attention except that of drone operators. It will also make life difficult for Afghan and Pakistani liberals who refuse to acknowledge that half-educated madressah students like the Taliban can also produce poetry.

While going through the book, one thing became obvious: this book will also have a major impact on how the future generations of Afghans define this war. “At your Christmas, Bagram is alit and bright, on my Eid, even the rays of the sun are dead, suddenly at midnight, your bombs bring the light to our homes, even the oil lamps are turned off,” writes a Taliban poet named Khepalwaak.

This is a situation that many Afghans can relate to, without bothering to know who is responsible for what. The blame, ultimately, will go to the foreign occupiers. And this 247-page book, published by Hurst & Company, London, has ensured that the Americans and their Nato allies are seen as cruel occupiers. “We love these dusty and muddy houses; we love the dusty deserts of this country. But the enemy has stolen their lights, we love these wounded black mountains,” this is Nasrat, a Taliban poetess.

And here is a poem on a mistaken drone attack on a wedding party: “The young bride was killed here. The groom and his wishes were martyred here. Hearts full of hopes were martyred here. The children were murdered; a story full of love is martyred here.”Although one-sided – as it does not mention how the militants invite drone strikes on innocent civilians by using them as human shields – the poem is powerful enough to outlive US and Nato press releases explaining the strikes.

Lloyd's plans for euro collapse; Let's be less productive; Inequality not the answer, it was our downfall; Rupee woes point to economic drift; Heartthrob Khan

1 Lloyds ‘has plans for euro collapse’ (BBC) Lloyd's of London is preparing contingency plans for the possibility of the euro collapsing, its chief executive has said. With Greece facing new elections in June and anti-bailout feelings high, there are fears Athens may be forced to exit the eurozone. Richard Ward said Lloyd's needs to "prepare for that eventuality". He said that Lloyd's would settle claims using multiple currencies. Mr Ward is one of the first bosses of a large UK business to admit he is planning for the end of the euro. Lloyd's of London is a market in which syndicates meet brokers and agree to take on particular risks.

2 Lessons from Facebook IPO (San Francisco Chronicle) On one hand, Facebook's IPO was a financial success. The company raised a war chest of $16 billion and minted a small army of millionaires and billionaires, capping off an improbable eight-year run that saw the social network grow to 900 million users. But Facebook allegedly played down the extent of its second-quarter business challenges in its prospectus, priced its offering higher than the market could bear, and drew scrutiny from a range of authorities. And Nasdaq, which waged a fierce war with the New York Stock Exchange over the right to list Facebook, embarrassed itself with glitches that delayed and prevented trading for hours.

"There are actually real businesses being created, and a lot of fundamental technology changes, so this hasn't dampened the enthusiasm at all," said Mark Siegel, managing director at venture capital firm Menlo Ventures. Yet he and others acknowledged that along with other recent weak tech IPOs, Facebook's offering revealed flaws inside the market machinery. And individual investors were certainly left wishing they had waited longer to buy.

3 Let’s be less productive (The New York Times) Has the pursuit of labour productivity reached its limit? Productivity is often viewed as the engine of progress in modern capitalist economies. Output is everything. Time is money. The quest for increased productivity haunts the waking hours of CEOs and finance ministers. Perhaps forgivably so: our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth.

But the relentless drive for productivity may also have some natural limits. Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work. Like it or not, we find ourselves hooked on growth. What, then, should happen when, for one reason or another, growth just isn’t to be had anymore? Increasing productivity threatens full employment. One solution would be to accept the productivity increases, shorten the workweek and share the available work.

But there’s another strategy for keeping people in work when demand stagnates. Perhaps in the long run it’s an easier and a more compelling solution: to loosen our grip on the relentless pursuit of productivity. At first, this may sound crazy, but there are sectors of the economy where chasing productivity growth doesn’t make sense at all. Certain kinds of tasks rely inherently on the allocation of people’s time and attention. The caring professions are a good example: medicine, social work, education. Expanding our economies in these directions has all sorts of advantages.

4 Inequality wasn’t the answer, it was our downfall (The Guardian) At last week's OECD forum in Paris much of the focus was on the drama being acted out in Brussels, as Europe's leaders met over dinner and failed, yet again, to resolve the debt crisis. In the summary of their discussions, OECD ministers promised to "tackle increasing inequalities through 'making work pay' approaches, support for low-income households, financial inclusion, as well as investment in people and jobs". There may be few concrete results, but it's now becoming increasingly fashionable to acknowledge that inequality is an economic problem in its own right, as well as a question of social justice.

For a long time, the growing gap between rich and poor caused hand-wringing among lefties, but was dismissed by many economists – and the political consensus – as an unfortunate but inevitable side-effect of the battle to subdue inflation, and, later, of technological change and globalisation. An excellent new paper by James Galbraith, the economist son of a famous economist father, presented in Paris but as yet unpublished, helps explain how we got here.

5 South Africa’s abandoned ‘dump’ people (Johannesburg Times) Thousands of destitute people - including hundreds of children - living on a Gauteng dump are being left by the provincial government to fend for themselves. This comes as the provincial department of local government and housing are refusing help to the residents on the landfill site, as the settlement is "not permanent", even though it has been there for 12 years. The residents are also faced with possible eviction, as the land on which the site is situated is owned by mining company Gold 1 and has been earmarked to be sold to the municipality.

Last week The Times exposed the appalling conditions under which the residents are living. An estimated 85% of the residents are HIV positive. People from across South Africa have been scrambling to provide aid. Until last week the 4,000 residents were surviving with one tap and five long-drop toilets.

6 Rupee’s woes point to economic drift (Khaleej Times) India’s rupee, which hit an unprecedented string of all-time lows last week, is set for more falls unless policymakers move quickly to put Asia’s third-largest economy back on track, analysts say. The rupee, which slumped to as low as 56.38 to the dollar last week, has lost around a quarter of its value in the past 12 months and is currently Asia’s worst-performing currency.

“The Indian rupee’s weakness is a symptom and not the underlying problem”, which is “policy incoherence, shifting global risk appetite and a comatose government”, said Rajiv Malik, senior economist at independent brokerage CLSA. Ratings agency Standard and Poor’s has cut India’s credit outlook to negative, growth is slowing and the current account deficit is at a three-decade high. “India’s weak national government remains the single biggest drag on activity,” said Glenn Levine, senior economist at Moody’s Analytics.

Many analysts are eyeing 60 rupees to the dollar as the next big mark for the currency as lacklustre US data and worsening European debt crisis prompt risk-averse investors to dump emerging-market assets. The government has forecast growth of 7.6% for this fiscal year to March 2013. But private forecasters are pencilling in numbers from six to seven percent — enviable by Western standards but not enough to reduce India’s crushing poverty, experts say.

7 Syria’s slaughter of lambs (Khaleej Times) Unlike the words in the song where one can cling to a tendril of hope, the gruesome killing sprees in the Syrian town of Houla belie that hope most absolutely. The wanton and cold blooded killing of over 90 innocents must prick the global conscience into wakefulness. It cannot keep seeking the refuge of words like atrocity and condemnation. This daily blood-drenched litany of deaths has blurred into a sort of dangerous acceptance and no longer freights the world with the level of responsibility demanded by the toll, not just of the hourly knell but also the count of the bodies. When women and children are the targets and the defenceless and the weak become martyrs without knowing why in a war which is not theirs, then the time has come for an awakening and it is up to the UN to initiate moves that immediately end the spill.

8 The heartthrob Khan (Rahul Singh in Khaleej Times) I was once taking an international flight out of Mumbai airport and was in the immigration queue. To my astonishment, just ahead of me was Aamir Khan, waiting his turn, like any other passenger. My admiration of the man went up. It has soared since his ongoing TV series made their debut, three weeks ago. “Satyamev Jayate”, is an inspired title for an inspiring programme. The first programme was on an extremely touchy and sensitive subject: female foeticide and the widespread illegal practice of determining the sex of an unborn child, using sonography devices. Whereas the male-female ratio in most societies is roughly equal, in India it is heavily skewed in favour of males. Why? Because boys are preferred to girls, partly due to the pernicious custom of dowry.

Aamir took this national scandal head-on, pointing out how venal gynaecologists and foolish parents were to blame. You would think that such a depressing subject could not possibly attract a large Indian audience. But you would be wrong. The first programme was a smash hit, with a viewership of an astounding 90 million, beating even Amitabh Bachchan’s “Kaun Banega Crorepati?” (Who wants to be a millionaire?) debut. The subsequent two episodes in the ‘Satyamev series, one on sexual abuse of children and the other on the high cost of marriages, have been just as riveting.

Aamir Khan has been awarded the Padma Bhushan, the third highest state honour, after the Bharat Ratna and the Padma Vibhushan. There has been a clamour that Sachin Tendulkar should get the Bharat Ratna. In my estimation, Aamir deserves it more.

9 Father of slain Tiananmen protestor kills himself (Dawn) The father of a man killed in the
1989 Tiananmen Square crackdown has hanged himself after two decades of failed attempts to seek government redress. A support group for parents of the crackdown’s victims said that 73-year-old Ya Weilin’s body was found in an unused underground parking garage below his residential complex. Zhang Xianling, a member of the group, says Ya killed himself out of despair and to protest the government’s long-standing refusal to address the grievances of the victims’ relatives. His death comes about a week ahead of the anniversary of the night of June 3-4, 1989 when the military crushed the weeks-long, student-led protests, possibly killing thousands of students, activists and ordinary citizens.

10 ‘Greece running out of cash by June’ (Straits Times) Former Greek prime minister Lucas Papademos warned Greece may run out of money by the end of June if international bailout funds are cut off following next month's election, a newspaper reported on Sunday. 'From late June onwards, the ability of the government to fund its obligations fully depends on the approval of the subsequent instalments of loans from the EFSF and the IMF,' To Vima newspaper quoted Mr Papademos as saying in a leaked memo. 'The available funds in the Greek government will be reduced gradually from about 3.8 billion euros on May 11 to about 700 million euros on June 18 and from June 20 will enter negative territory at the level of around one billion euros.'

11 India Maoists assembling rocket launches (The Times of India) Maoists are believed to be churning out low cost rocket launchers from makeshift workshops, with parts sourced from industrial tool manufacturing units in Kolkata and the National Investigation Agency reckons the ultras may have stockpiled 6,000 of these in the jungles of Chhattisgarh. The NIA believes the operation was being overseen by Sadanala Ramakrishna, who was recently arrested from Kolkata and was said to be slain Maoist leader Kishenji's successor. The agency, which is investigating Ramakrishna's case, found that the chief of CPI (Maoist) Technical Research and Arms Management Unit may have already managed to send over 6,000 rocket launchers to Chhattisgarh.

12 Water shortage looms for India farmlands (The Wall Street Journal) A water shortage is looming over many of India’s most productive farmlands, a development that may pose serious challenges to the country’s food security. We are talking about the farmlands that drove the country’s so-called Green Revolution in the mid-sixties, a program that made India largely self-sufficient when it came to food. India’s usable supply of water by 2030 could fall short of projected demand by as much as 50%, according to a recent study by the Council on Energy, Environment and Water, a New Delhi-based think tank.

“In your most productive states, either your surface irrigation potential has already been met, or your groundwater potential is being used in an unsustainable manner,” said Arunabha Ghosh, chief executive officer of the Council on Energy, Environment and Water. Over-exploitation of water has already happened in 15% of the total irrigated area, spanning in parts of 6-7 states, he said. “Haryana, Punjab and Rajasthan are already consuming more ground water than was available annually and several other states are approaching the limits,” Mr. Ghosh said.

Saturday, May 26, 2012

India growth forecast lowered; No sympathy -- IMF chief to Greeks; Private space run makes history; A cry for quiet in the office; Myths, realities and India; Renesas may cut 14,000 jobs

1 Economists cut India growth forecasts (The Financial Times) Goldman Sachs and Bank of America Merrill Lynch became the latest global banks to downgrade India's economic growth outlook on Friday, in a sign that the sharp slowdown affecting Asia's third-largest economy is worsening. Goldman cut India's growth estimates to 6.6% from 7.2% for the fiscal year ending in March 2013, while BofA revised its forecast to 6.5% from 6.8% for the same period. The two join Morgan Stanley, which revised its annual outlook for India's economic growth to 6.3% this week, blaming parliamentary deadlock for its downward revision. New Delhi is due to release its latest growth figures next Thursday.

India's economy has been slowing for more than a year as corruption scandals involving senior members of the Congress-led coalition government have paralysed parliament and blocked key reforms to boost investment. India's macroeconomic landscape has deteriorated further since the start of the year. New Delhi's fiscal and trade deficit have ballooned to 5.8% and 9.9% of GDP respectively, while inflation has shot back into double digits. The Indian rupee also weakened to a record low against the dollar this week, which is likely to fuel inflation further in coming months.

2 IMF chief to Greeks: No sympathy (The Guardian) The International Monetary Fund has ratcheted up the pressure on crisis-hit Greece after its managing director, Christine Lagarde, said she has more sympathy for children deprived of decent schooling in sub-Saharan Africa than for many of those facing poverty in Athens. Lagarde insists it is payback time for Greece and makes it clear that the IMF has no intention of softening the terms of the country's austerity package. Using some of the bluntest language of the two-and-a-half-year debt crisis, she says Greek parents have to take responsibility if their children are being affected by spending cuts. "Parents have to pay their tax," she says.

Greece, which has seen its economy shrink by a fifth since the recession began, has been told to cut wages, pensions and public spending in return for financial help from the IMF, the European Union and the European Central Bank. Asked whether she is able to block out of her mind the mothers unable to get access to midwives or patients unable to obtain life-saving drugs, Lagarde replies: "I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time. Because I think they need even more help than the people in Athens."

3 Private space runs makes history (The Wall Street Journal) The aerospace industry reached a milestone Friday, when Space Exploration Technologies Corp. became the first private company to dock a spacecraft with the International Space Station, some 240 miles above Earth. After two days of complex maneuvering, the capsule's propulsion systems and sensors were validated and the spacecraft slowly inched toward the orbiting station until it was close enough to be snared by a robotic arm.
The test flight culminates years of planning to demonstrate Space Exploration's ability to reliably launch cargo missions to supply the orbiting laboratory, a venture supported by a group of 16 nations. The brainchild of 40-year-old Elon Musk, former Internet whiz kid and co-founder of PayPal Inc., SpaceX, as it's known, is under a $1.6 billion contract with NASA to begin shuttling cargo to the space station.

4 Facebook shows a sucker is born every minute (The Wall Street Journal) If you're one of the shareholders suing Facebook Inc. because the social-networking company and its underwriters played favorites about disclosing changes to analysts' forecasts, then you deserve to be compensated for your losses or have your trades wiped out if the allegations turn out to be true. Still, that doesn't mean you aren't an old-fashioned Wall Street sucker.

The reason: You didn't have to follow Facebook's initial public offering with the zeal of Robert Caro to recognize there were significant problems. Consider that as Facebook readied its IPO, there was a lot of shifty business: On May 15, the price was boosted to $38 from a range that bottomed at $28. The next day, the offering size swelled by 50 million shares. Then came a disclosure that insiders would sell 53% more shares, or 84 million shares, in the IPO than previously planned. Sure, there still was lots of interest in Facebook's deal. But the warning signs pointed to a big flush: insiders and longtime investors selling out the maximum number of shares at the highest possible price.

5 A cry for quiet in the office (The New York Times) The walls have come tumbling down in offices everywhere, but the cubicle dwellers keep putting up new ones. They barricade themselves behind file cabinets. Or they follow an “evolving law of technology etiquette,” as articulated by Raj Udeshi at the open office he shares with fellow software entrepreneurs in downtown Manhattan. “Headphones are the new wall,” he said, pointing to the covered ears of his neighbors. Companies are redesigning offices, piping in special background noise to improve the acoustics and bringing in engineers to solve volume issues. “Sound masking” has become a buzz phrase. After surveying 65,000 people over the past decade in North America, Europe, Africa and Australia, researchers at the University of California, Berkeley, report that more than half of office workers are dissatisfied with the level of “speech privacy,” making it the leading complaint in offices everywhere.

6 Spain’s Bankia seeks 19bn-euro bailout (BBC) Spain's fourth-largest bank, Bankia, has asked the government for a bailout worth 19bns euros ($24bn). Bankia also restated its results - now saying it made a 2.98bn-euro loss for 2011 rather than the 309m euros in profit it announced in February. Earlier on Friday, trading in Bankia shares was suspended on the Madrid stock exchange while its management put together a restructuring plan. Bankia has already been bailed out because of its bad property loans. Its shares fell 7.4% on Thursday to close at 1.57 euros, which is 58% down from their listing price in July 2011.

7 Myths, realities and India (Sidin Vadukut in Khaleej Times) When I look at the incompetence in the corridors of government in New Delhi, the sheer social depravity showcased in Aamir Khan’s television show, the insensitive squabbling over what daily income qualifies you to be poor, the diseased semi-corpse that is the Indian rupee, the mediocrity of media and the daily self-flagellation that my fellow Indians engage in on a daily basis on Twitter, Facebook and other online avenues, there is only one thought that can come to the mind of a young, passionate, patriotic, idealistic and ruggedly handsome Indian like me: This is a wonderful opportunity for foreigners to come and write profoundly moving books about the riveting contradictions that is India and its people!

For instance just the Indian Premier League is a phenomenon positively heaving with “book about India” possibilities and delightful contradictions. However, as far as I know, not a single foreign writer has stepped up to leverage this pregnant opportunity. This injustice must end now. Remember, the ultimate objective here is simple: Indians cannot wait to read your books about them. Please write them urgently.

Idea 1: Columnist with major American magazine moves into a slum in Mumbai and closely observes how a family of seven are responding to the Indian Premier League. He contrasts this with how another family, chock full of typically eccentric Oxford and Cambridge graduates, enjoy Test cricket in England. Idea 2: Rising star Canadian journalist simultaneously profiles $2 million dollar man Ravindra Jadeja and Jadeja’s driver Sanjay Singh. The idea is to investigate the lives of two people who are so near, yet so far. Realising, halfway through, that both Jadeja and Singh are as interesting as used towel socks, the writer cleverly decides to include one more profile: that of Mahatma Gandhi. The book, immediately banned in India, sells 123,000 copies in Delhi alone.

8 Of two Olympians from Bhutan (Dawn) In a remote Himalayan valley, an archer and a shooter are calmly preparing for a trip of a lifetime to represent Bhutan at the London Olympics, but winning is not the main target. Archer Sherab Zam and shooter Kunzang Choden, both 28-year-old women, are the only two athletes to represent the remote kingdom at the 2012 Games, competing on wildcard entries allocated to ensure all 204 National Olympic Committees can take part even if no athletes have qualified.
Neither Sherab nor Kunzang expect to win medals for Bhutan, an impoverished, largely Buddhist country between India and China which only opened up to foreigners in 1974, banned television until 1999, and uses happiness to measure its success. Competing against highly-funded athletes with state-of-the-art equipment from richer countries is tough, but Sherab and Kunzang – who do not own a bow or rifle – are both realistic and their aim is to try to beat their personal best. “Participation is more important than winning a medal,” Sherab said in Thimphu, which claims to be the only world capital without a traffic light. Kunzang added: “Bhutan is just a small country of just 700,000. There is a lot of pressure on us but we must be realistic about our chances. We just want to do well.”
9 Chip-maker Renesas may cut 14,000 jobs (Straits Times) Japanese semiconductor maker Renesas Electronics is considering cutting up to 14,000 jobs or 30% of its workforce as part of a major restructuring plan, news reports said. The company is also considering selling a major factory to a Taiwanese firm, while closing or scaling down other plants, said the Nikkei and the Asahi Shimbun newspapers as well as Kyodo News. Renesas, which lost 62.6 billion yen in the year to March, also plans to raise 100 billion yen, mainly from its top shareholders NEC, Hitachi and Mitsubishi Electric, the Nikkei said.
10 Zuckerberg loses $3.2bn in a week (Sydney Morning Herald) Facebook co-founder Mark Zuckerberg lost $3.2 billion during the week as shares of his social-networking company fell 16.5%, according to list of the world's richest people. Zuckerberg, 28, was the biggest loser among the Bloomberg Billionaires Index, with a $16.2 billion fortune ranking him as the 35th richest person in the world.

11 Asian ‘honour’ killings in Britain (Brisbane Times) A taxi driver, Iftikhar Ahmed, 52, and his wife, Farzana, 49, are now on trial for their daughter's murder. They have pleaded not guilty and the jury is still hearing the evidence. But the case has turned the spotlight on so-called ''honour'' crimes in some of Britain's migrant communities. About a dozen women a year die in acts of revenge over breaches of ''honour'' that might include refusing to wear traditional clothes or accept an arranged marriage, or choosing a man of whom the family disapproves.

UK police recorded more than 2,800 honour attacks in 2010, a figure that is understated because only 39 of the country's 52 police forces revealed their numbers. Among the 12 forces able to provide comparison figures from 2009, there was an overall rise of 47% in such incidents. Five hundred of the attacks were in London. The suicide rate among south Asian women in Britain is three times the national average, thought to be the result of women taking what they see as the only way out of an intolerable situation - or being forced to kill themselves.

12 Welcome the rupee’s fall (TN Ninan in Business Standard) A falling currency is a sign of weakness, and the decline of the rupee reflects the many ways in which the economy has been mismanaged; the loss of competitiveness gets neutralised through a cheaper currency. Some players may have got caught unawares by the sudden drop, but commentators have woken up to the positive macroeconomic effects of the rupee’s depreciation. Players should be relieved that a key element of macro-adjustment has been more or less achieved — partly through fortuitous commodity price movements.

While it is always dangerous to make short-term forecasts about markets, it is logical to assume that the rupee has found an appropriate level. The currency depreciation should give a boost to exports and to import substitution; both will give a fillip to domestic economic activity. This is not the end of the economy’s many problems; the fiscal deficit is still large, and the rupee depreciation will add to inflation. Still, an important macroeconomic imbalance has been addressed.

13Khaleej Times cartoon, Face-to-Facebook

Friday, May 25, 2012

China finally slows; The anti-MBA; Life in Kenya waste dump; Dell stock falls 17%; Vatican Bank chief sacked; India petrol price hike won't curb deficits

1 China finally slows (The New York Times) A nationwide real estate downturn, stalling exports and declining consumer confidence have produced what a Chinese cabinet adviser, quoted on the official government Web site on Thursday, characterized as a “sharp slowdown in the economy.” Though the Chinese economy continues to expand, construction workers are losing jobs in droves and retail sales grew last month at the slowest pace in more than three years. Investments in fixed assets have increased more slowly this year than in any year since 2001. The most striking feature of the slowdown is that it extends beyond the coastal provinces, which depend on exports and are closely linked to the global economy, to the country’s far more insular interior, including cities like Xi’an in northwestern China.

China’s unexpected economic difficulties are starting to unnerve investors in world markets, especially commodity markets, as China is the world’s largest consumer of most raw materials and the second-largest consumer of oil. A deepening slowdown would ripple across the world economy. Government indexes show real estate prices are falling in more than half of the country’s top 70 urban markets, Xi’an among them. Standard & Poor’s Ratings Services and Moody’s each issued reports on Thursday warning that many of China’s real estate developers face a severe cash squeeze as apartment sales slow to a crawl. The developers still owe heavy interest payments on bank loans.

2 The Anti-MBA (The New York Times) The International Masters Program in Practical Management begins by telling the students that most graduate business degrees “are destructive” or that the case-study method, the hallowed approach adopted by Harvard and many of the world’s other leading business schools, is actually “demeaning.” But then, most management courses don’t have Henry Mintzberg. He holds two graduate degrees in management from the Massachusetts Institute of Technology. But since at least 2004, when he published his book “Managers Not MBAs,” he has acquired a hard-earned reputation as the scourge of conventional management education. The rise of the business-school-trained MBA, he says, is “a menace to society.”

“The philosophy of the case study method is that you simulate management practice on the basis of reading a 20-page study. George W Bush went to Harvard Business School and I don’t think he even read 20 pages. But he’s a good example of how disastrous that approach can be,” Dr. Mintzberg said. With Jonathan Gosling, Mr. Mintzberg founded the IMPM in 1996 as a kind of anti-MBA.

Instead of recruiting students in their 20s or early 30s with little or no business experience, the IMPM requires candidates to have at least 10 years of management experience. Rather than focusing on functional skills like accounting, marketing or finance, the program is devoted to what it calls “management mind-sets”: it encourages students to consider their own business difficulties and ambitions from a variety of perspectives. In contrast to the use of case studies to develop analytical tools under the tutelage of a professor, Dr. Mintzberg’s students are expected to “share competences” with each other based on their own experience as managers.

3 After 175 years, New Orleans ceases to have a daily newspaper (The New York Times) The Times-Picayune, a 175-year-old fixture in New Orleans and a symbol of the city’s gritty resilience during Hurricane Katrina and its aftermath, has buckled under the pressures of the modern newspaper market. Advance Publications, owned by the Newhouse family, said Thursday it would scale back the printed edition to three days a week and impose staff cuts as a way to reduce costs as well as shift its emphasis to expanded online coverage.

The decision will leave New Orleans as the most prominent American city without a newspaper that is printed every day. But it also reflects the declining lure of the paper as a printed product. In 2005, before Katrina struck, the paper had a daily circulation of 261,000; in March of this year, the circulation was 132,000.

4 Life in a Kenyan waste dump (San Francisco Chronicle) Weighted with heavy sacks of discarded milk bags and meat bones slung across her back, a plastic bag of rotting cabbage in her hand, Rahab Ruguru walks through a smoky landscape of putrefied burning trash. "Working here is how I am able to feed my children," said the 42-year-old mother of six. "Dodging pigs, used condoms, eating what I find. No, it's not good for me. But it is a job, and I have to persevere."

Ruguru is one of an estimated 6,000 scavengers who arrive daily to mine the Dandora Municipal Dump Site, a sprawling, 30-acre garbage dump located nearly 10 miles north of Nairobi's thriving business district. Nearly 1 million people live in slums surrounding Dandora, the city's only trash site. While scavenging provides a living for Ruguru and others, some slum dwellers are campaigning to close it down. As a result, the dump's future has become the subject of a continuing political debate.

International law requires dump sites to be decommissioned after 15 years, but Dandora has been in operation for nearly 40 years. While the Nairobi City Council declared the site "full" in 2001, an estimated 2,000 metric tons of waste is dumped daily, city officials say. Ruguru arrived in Dandora after post-election violence in 2007 forced her family to leave their farm near the western town of Eldoret. Except for her youngest child, a 4-year-old daughter, her entire family works the dump daily to pay for food, clothes and school books and uniforms. For Ruguru, the dump's relocation will make little difference in improving her life. "If this site moves, then I will move with it," she said.    

5 Dell stock falls 17% (San Francisco Chronicle) Dell stock dropped 17% after the company forecast fiscal second-quarter revenue missed analysts' estimates. It was the biggest decline since 2000. The Texas PC maker also missed expectations for first-quarter sales and earnings. The company is reorganizing how it packages its products as demand for Apple's iPhone and iPad and other mobile devices eats into its notebook sales.

6 Catering for Mark Zuckerberg’s wedding (San Francisco Chronicle) In case you weren’t wondering about what kind of food was served at billionaire Mark Zuckerberg’s wedding, he got it catered by two Palo Alto restaurants: “Food was from two decidedly budget friendly local restaurants Fuki Sushi and Palo Alto Sol. Dessert? Burdick chocolate mice, which the couple had nibbled on their first date. These cost, if you are wondering, $3.25 a piece, less if you order them in catering-sized packages.”

7 UK recession worse than thought (The Guardian) The prospect of fresh action to boost the flagging British economy loomed larger on Thursday after official figures showed a steeper fall in activity than previously thought and the crisis-hit eurozone drifted towards a deeper slump. Labour seized on data from the Office for National Statistics (ONS) showing that gross domestic product declined by 0.3% in the first three months of 2012 as evidence that Britain is ill-prepared to withstand a deterioration in the rest of Europe over the coming months. The ONS had originally pencilled in a 0.2% drop in output for the first quarter

8 Has India’s government stalled? (BBC) "I will be the first person to say we need to do better," Prime Minister Manmohan Singh said this week while releasing his troubled government's report card on three years in office during its second consecutive stint. "But let no one doubt that we have achieved much." With nearly 7% growth despite a global downturn, India remains one of the fastest growing economies in the world, he said.

But many things don't quite square up, say critics. Vast swathes of the country, including many of the main cities, go without electricity for several hours every day despite the uptick in generation. India's red-hot telecom industry is now bedevilled by charges of rigging spectrum auctions, and large scale cancellation of licenses. Inflation is menacingly on the rise again, and social welfare spending is hobbled by leakage and graft. The government is also seen as being unable to make up its mind as to who really constitutes the poor. Economic reforms have stalled, investment has slowed and the rupee is tanking.

But the real problem, as analyst Pratap Bhanu Mehta says, may lie in Congress, the ruling party behind the government. He says the party has put India's growth story at risk, presiding over "an appalling administration where institutions are unravelling", pushing myopic social security schemes, and being out of sync with fast changing federal impulses. It is a government which many believe - and some opinion polls suggest - has lost its authority.

9 Vatican Bank chief sacked (BBC) The director of the Vatican Bank, Ettore Gotti Tedeschi, has been removed from his post for dereliction of duty, the Vatican says. The bank's board of directors unanimously passed a no-confidence vote in Mr Gotti Tedeschi, a statement said. It said he had failed "to carry out duties of primary importance", but it did not elaborate. In 2010 Italian police launched an investigation against Mr Gotti Tedeschi as part of a money-laundering inquiry. Members of the board believed Mr Gotti Tedeschi's dismissal was needed to "maintain the vitality of the bank", the Vatican statement said.

10 China smells a cannibal (Johannesburg Times) Police in southwest China have detained a man suspected of murdering more than a dozen boys and young men, chopping up their bodies and selling the flesh to unsuspecting consumers, reports said. Zhang Yongming, 56, was detained two weeks ago in Nanmen village in Yunnan province and is being investigated over the murder of a 19-year-old man in late April, the Guangxi News website reported. It said Zhang had previously served almost 20 years in jail for murder. Zhang was known in the village as the "cannibal monster," the site reported, quoting residents as saying they had seen green plastic bags hanging from his home, with what appeared to be white bones protruding from the top. Police feared that Zhang had fed human flesh to his three dogs, while selling other parts on the market, calling it "ostrich meat", according to The Standard.

11 Rio+20 is our future (Ban Ki Moon in Khaleej Times) Twenty years ago, there was the Earth Summit. Gathering in Rio de Janeiro, world leaders agreed on an ambitious blueprint for a more secure future. They sought to balance the imperatives of robust economic growth and the needs of a growing population against the ecological necessity to conserve our planet’s most precious resources – land, air and water. And they agreed that the only way to do this was to break with the old economic model and invent a new one. They called it sustainable development.

Two decades later, we are back to the future. The challenges facing humanity today are much the same as then, only larger. Global economic growth per capita has combined with a world population (passing seven billion last year) to put unprecedented stress on fragile ecosystems. We recognise that we cannot continue to burn and consume our way to prosperity. Yet we have not embraced the obvious solution – the only possible solution, now as it was 20 years ago: sustainable development. Fortunately, we have a second chance to act. In less than a month, world leaders will gather again in Rio – this time for the UN Conference on Sustainable Development, or Rio+20.

12 India petrol price hike won’t curb deficits (The Wall Street Journal) India's move to raise gasoline prices could signal the government's intention to start improving its finances, but doesn't address the bigger problems of a large fiscal deficit and a widening current-account gap, analysts say. The two deficits are the main concerns shrouding India's economy, analysts say, hurting confidence in the nation's prospects, holding back investment and battering the rupee.
While Wednesday's 11.5% rise in gasoline prices is a step in the right direction, observers say, subsidies on diesel and cooking gas are the main concerns. Diesel alone accounts for about 43% of India's total fuel-product sales. The government still regulates diesel and cooking-gas prices, and partly compensates state-run companies for selling the fuels at discounted rates in an effort to control inflation. This swells the government's subsidy bill, a principal factor in India's fiscal deficit, forecast to be 5.1% of gross domestic product in the year ending in March 2013.
had been arrested hours after the alleged attack and would appear in court today. The latest incident comes weeks after the boy and his seven-year-old sister both claimed they had been dragged into the same school toilets and raped on separate occasions over the past two months. A teacher was suspended by the Education Department shortly after the allegations surfaced last month, but he has yet to be charged with any crime.

Wednesday, May 23, 2012

India in free fall; ILO has a role amidst global crisis; Blame game after Facebook flop show; Crisis of European democracy; Shining India, swaggering India

1 India in free fall (Eswar Prasad in The Wall Street Journal) The falling Indian rupee, which Monday closed at an all-time low relative to the dollar, is a perfect metaphor for the free fall India's economy seems to be in. Growth has slowed to below 7%, and industrial growth has virtually ground to a halt. High oil prices widened the current account deficit, and now finicky global investors are pulling capital out.
Prime Minister Manmohan Singh and his government face a stark choice that they can no longer avoid. They can try to get the central bank to intervene in foreign exchange markets to ride out the storm. Or they can heed the real message of the rupee's fall: India's policy making has lost its way. One problem is New Delhi's undisciplined fiscal policy, which has hurt confidence in both India's ability to weather adverse shocks and its long-term prospects. A high level of public debt—nearly 70% of GDP—and a persistently high budget deficit have pumped up overall demand in the economy. This hamstrings monetary policy, which has to keep tightening, and also contributes to the large current account gap. This leaves the economy vulnerable to shocks such as oil price increases and capital flow reversals.
New Delhi seems to lack the spine to push through reforms that would have broad benefits. Mr. Singh has done too much backtracking, such as his overnight retreat last year on liberalizing foreign investment in retail. Of course, to prolong his political life, Mr. Singh could switch to survival mode for the rest of his term, clinging to power while devoting his energy to fending off accusations of graft and mismanagement. This would be a sad legacy for a man who put the country on a high-growth trajectory through reforms he instituted 20 years ago.
2 India land buying may get tougher for companies (The Wall Street Journal) Acquiring land in India isn’t easy to begin with, especially if you are planning to build factories, power plants, special economic zones or highways. It may get harder: If a parliamentary panel has it way, buying land for industrial and infrastructure may become close to impossible.

Industry is alarmed by the panel’s suggestion that the government should no longer help the private sector buy land.  Instead, they recommend the government should intervene in negotiations with landowners – typically farmers or people classified as tribals – only when projects that serve the public interest are involved. By this they mean things like schools, hospitals, irrigation systems and defense projects.

Adi Godrej, the head of the Confederation of Indian Industry, said that if the panel’s recommendations get approved, the industry would be left to “fend for itself.” Real estate lobby group Credai said that if the government decided to stay clear of private land acquisitions, at least it should make it easier for companies to do so on their own by simplifying the procedures necessary to compensate landowners. Land acquisition hurdles have held back several big-ticket projects. South Korea’s Posco, for instance, has been trying to resolve the deadlock over its $12-billion steel project in the eastern state of Orissa for the past six years, but to no avail.

3 How ILO could play a role in the global crisis (The Guardian) The Troika – the European Central Bank (ECB), the European Commission, and the IMF – is dragging Europe into its second recession in three years. The ECB by itself has the ability to end this crisis, by guaranteeing low interest rates on the sovereign bonds of countries such as Spain and Italy. Member governments would then be able to restore normal economic growth and employment. But the ECB refuses to do this – partly because the Troika is using the crisis as an opportunity to force changes.

There is one international institution that, because its governance structure includes labor unions, is sometimes able to take a more progressive stance on these vital issues. That is the International Labor Organization (ILO), affiliated with the United Nations. The ILO is thus differentiated from such organizations as the IMF, the World Bank, or the OECD (Organization for Economic Co-operation and Development) – all of which have an enormous influence which tends to reinforce the status quo, or worse.

The ILO estimates that the world has lost 50m jobs since the world economic crisis and Great Recession began – and the Troika is adding to the toll. On 28 May, the ILO will choose a new director general. There is one candidate who is most likely to try to harness the ILO's potential to challenge the devastating economic policies that have caused so much unnecessary unemployment and suffering in the past four years. That is Jomo Kwame Sundaram of Malaysia, the only Asian candidate. He has shown clear understanding not only of the causes of the current economic crisis, but also of the failure of the relevant government and international institutions to bring us out of it. He would also expose the fallacies of the labor market liberalization policies currently being touted as the solution.

4 Winners and losers in Facebook’s IPO hype (The Guardian) It is too soon to tell whether Facebook shares will end up being a good buy or a turkey, but the reaction to the initial public offering (IPO) since the first day of trading should serve as a serious warning. Of course, Facebook is unlikely to go out of business, but it is certainly possible that its business model is not sufficiently robust to justify a position among corporate America's elite in market capitalization. A year or two down the road, it may well turn out that its share price ends up at half or less of its IPO price (at time of writing, it is already off 13%).

In this case, there will have been an enormous transfer of wealth from the purchasers of Facebook stock to those able to cash out following the IPO. This will make many of those on the inside of the company fantastically wealthy. However, much of their wealth would not result from making a good product that society valued; rather, it came from being part of a successfully hyped company.

Even if Facebook ends up losing much of its value in the years ahead, it is virtually certain that Mark Zuckerberg and other inside players will remain incredibly wealthy individuals. After all, Steve Case is still one of the country's richest people even though his former company, AOL could be purchased for pocket change today. The wealth that these people command was not created out of thin air. It came from suckers who bought the hype.

5 Shutting out masses in IPO, as in Facebook case (San Francisco Chronicle) The Facebook flop is just the latest evidence of a growing and unsustainable imbalance across the tech investment spectrum. On Monday, Facebook's shares dropped through the initial public offering price of $38, falling nearly 11% to close at $34.03. That follows a string of tech firms that have seen their stock dip below the offering price in recent months, including Groupon, Zynga and Angie's List. Others like Yelp and Zillow are above their offering price, but below where the stock started trading on the first day.

It means that venture capitalists and angel investors are consistently winning big, leaving little money on the table as they liquidate their holdings. But the pension funds and other institutional investors that buy up the shares at the offering price - and the individual investors who can only snag shares once trading starts - are getting hosed. "Facebook left nothing for the common investor," Forbes Publisher Rich Karlgaard wrote. "The insider pig pile of (private equity) firms and celebrity Silicon Valley angels took it all. This is a rather new, post-Sarbanes-Oxley fact, and it should make Americans very, very angry."

6 Goldman Sachs gains $235m in Facebook IPO (San Francisco Chronicle) $235 million is how much Goldman Sachs earned selling its stake in Facebook's IPO. The Wall Street bank doubled its money on a bet it made on the social-network giant in 2010. Goldman, which has funded rising technology companies including Facebook, LinkedIn and Dropbox, is ramping up investments in Web startups, leading a $52 million round of funding in AnchorFree, a Mountain View maker of Internet-surfing software.

7 Blame game after Facebook flop show (The New York Times) Wall Street is playing the Facebook blame game. As shares of the social network tumbled in their second day of trading, bankers, investors and analysts wondered what had gone wrong with the initial public offering of Facebook, the most highly anticipated technology debut in years. Some fingers are pointing at Morgan Stanley, the lead banker on the IPO, while others criticize Nasdaq and even Facebook itself. In the aftermath, critics contend that Facebook’s offering price was too high and too many shares were sold to the public, hurting the stock’s performance out of the gate.

For Morgan Stanley, landing the Facebook public offering was one of the biggest investment banking coups in almost a decade, and a successful debut would most likely have cemented its position as the dominant force in technology I.P.O.s. But Morgan Stanley now faces questions about its role in the events surrounding Facebook. Rivals involved in the Facebook underwriting process say that Morgan Stanley exerted an enormous amount of control over important aspects of the process, including dominating meetings with institutional shareholders.

8 Zuckerburg’s post-marriage property status (The New York Times) The new Mrs Mark Zuckerberg might not have to worry much about money, but that doesn't mean she is automatically a billionaire. The timing of Mark Zuckerberg's marriage to his college sweetheart, Priscilla Chan, on Saturday, just a day after he took his company public, was certainly curious. Was he looking to clarify his net worth, which, with roughly 503 million shares, now stands at about $17 billion? And if true, many observers are speculating, did that have to do with the terms of a prenuptial agreement? The Zuckerbergs are not saying.

But what is clear, say matrimonial law experts, is that whatever Zuckerberg earned before the marriage is still solely his property afterwards. California is one of fewer than a dozen states that follow community property laws, which specifically outline how property is divided between two spouses (or, in some cases, registered domestic partners). The rest of the states generally follow equitable division rules, where the court tries to divide assets fairly at divorce. Generally, the rule for community property states that anything that was one spouse's property before marriage is considered separate.

9 Crisis of European democracy (Amartya Sen in The New York Times) If proof were needed of the maxim that the road to hell is paved with good intentions, the economic crisis in Europe provides it. The worthy but narrow intentions of the European Union’s policy makers have been inadequate for a sound European economy and have produced instead a world of misery, chaos and confusion.

There are two reasons for this. First, intentions can be respectable without being clearheaded, and the foundations of the current austerity policy, combined with the rigidities of Europe’s monetary union (in the absence of fiscal union), have hardly been a model of cogency and sagacity. Second, an intention that is fine on its own can conflict with a more urgent priority — in this case, the preservation of a democratic Europe that is concerned about societal well-being. These are values for which Europe has fought, over many decades.

Perhaps the most troubling aspect of Europe’s current malaise is the replacement of democratic commitments by financial dictates. Europe cannot revive itself without addressing two areas of political legitimacy. First, Europe cannot hand itself over to the unilateral views of experts without public reasoning and informed consent of its citizens. Second, both democracy and the chance of creating good policy are undermined when ineffective and blatantly unjust policies are dictated by leaders.

10 Barcoding everyone at birth (BBC)  Science fiction writer Elizabeth Moon argues that everyone should be given a barcode at birth. “If I were empress of the Universe I would insist on every individual having a unique ID permanently attached - a barcode if you will; an implanted chip to provide an easy, fast inexpensive way to identify individuals. It would be imprinted on everyone at birth. Point the scanner at someone and there it is.

“Having such a unique barcode would have many advantages. In war soldiers could easily differentiate legitimate targets in a population from non combatants. Anonymity would be impossible as would mistaken identity making it easier to place responsibility accurately, not only in war but also in non-combat situations far from the war.”

11 Zuma painting, The Spear, goes into hiding (Johannesburg Times) As threats against the Goodman Gallery increased, the controversial painting of President Jacob Zuma with his genitals exposed was relocated to an unknown safe location. The Spear, by Cape Town artist Brett Murray, was moved after two men defaced it with red and black paint. The owner of the Goodman Gallery, Liza Essers, said: "The extent of the rage has astonished me and upset me very much. I furthermore never imagined that this debate would transform into harmful physical action.'' The Young Communist League, which is planning a march to the gallery tomorrow, said the men who defaced the painting should be given awards for their bravery. Cosatu, which has been vocal in the controversy, said it sympathised with the men and understood their anger.

12 World’s tallest tower opens in Tokyo (Khaleej Times) The world’s tallest tower and Tokyo’s biggest new landmark, the Tokyo Sky Tree, has opened to the public. High-speed elevators take visitors to the observation decks of the 634-meter (2,080-foot) tower. It is recognized by Guinness World Records as the tallest tower, beating out the Canton Tower in China, which is 600 meters (1,968 ½ feet). The world’s tallest structure is Dubai’s Burj Khalifa, which stands 828 meters (2,717 feet). That’s in a different category because it’s a skyscraper, not a tower. The Sky Tree will serve as a broadcast tower for television and radio, along with being a tourist attraction.

13 India down in the dumps (Khaleej Times) While non resident Indians who earn money abroad may be delighted with the spike in the rupee values they are getting for remittances the dream run for India’s bouncing economy seems to have hit a rut. The policymakers who were only recently touting the market of the future are now redoing their sums with something akin to despair.

Much of the reason for the slip to a dubious distinction of being the steepest drop of any Asian economy is the spectre of protectionism that has again enveloped India’s progress. For years this element in the Indian industrial base corroded progress and the inward thinking, closed-door attitude kept the world away. Just as things had begun to swing for the 1.2 billion strong market, and the world was seeing India as a gateway they slammed the doors shut again. Indeed, the question to be asked now is if India has missed the international bus and will there be another one coming its way?

14 Remembering the founder of Jacobabad (Dawn) The year 2012 marks the 200th birth anniversary of the founder of the city of Jacobabad, General Johan Jacob, but hardly does anyone remember this great pioneer of the city and the district. Even the 1.24 million people residing in the district have completely forgotten the man who single-handedly turned a desert into thousands of acres of arable land in just twenty years. One can appreciate the scale of progress and prosperity his works brought to the region by just comparing it with the contiguous areas in today’s Baluchistan which were not under his administrative jurisdiction.
Being a native of the city, it is a moral duty to pay homage to this great man whose rule spanning over just about two decades (1838-1858) bears fruit for the local populace to this day. Apart from being a resolute soldier, then a chivalrous commander, and an unwavering commandant of Sind Irregular Horse, he was an able administrator, an innovative inventor, a creative architect, a meticulous engineer, a master city planner as well. Besides his military expertise and achievements, his civilian services for the area are remarkable so much so that after nearly 200 years of his reign, still there are tangible evidences of his works for the district.
His single most important feat was the excavation of Begaree Canal, originating from Guddu barrage on river Indus and going round the district irrigating thousands of acres of land previously uncultivated. He resolved the problem of unavailability of potable water for the residents by excavating a tank that contained water brought from Indus through a canal. Death knocked at his door way too early when he fell to brain fever and turned his toes up peacefully on 5th December 1858, he was just 46, but he had accomplished much more than his age would suggest.
15 Shining India, swaggering India (Sidharth Bhatia in The Times of India) India has not handled its success well. Instead of the greater responsibility that should come with greater power and wealth, we have chosen to swagger. We cannot stand anyone making fun of our foibles or our accent. We are ready to use our diplomatic resources if some advertisement in a far away country spoofs our ways. The world is laughing at our pompousness and this makes us more furious.

The sorriest part of this is that our rage is turned against those who cannot defend themselves. And those at the bottom of the social pyramid, who suffer the most inequity and therefore have some justification to be angry, are expected to meekly surrender. What will happen if one day they start showing their rage?