1 The root of Europe’s riots (Ha-Joon Chang in The Guardian) Throughout the 1980s and 90s, when many developing countries were in crisis and borrowing money from the International Monetary Fund, waves of protests in those countries became known as the "IMF riots". They were so called because they were sparked by the fund's structural adjustment programmes, which imposed austerity, privatisation and deregulation. Those rioters were not just expressing general discontent but reacting against the austerity measures that directly threatened their livelihoods, such as cuts in subsidies to basic commodities such as food and water, and cuts in already meagre welfare payments.
The IMF has made a lot of changes in the past decade or so. It has become more cautious in pushing for financial deregulation and austerity programmes, renamed its structural adjustment programmes as poverty reduction programmes, and has even (marginally) increased the voting shares of the developing countries in its decision-making. Given these recent changes in the IMF, it is ironic to see the European governments inflicting and old-IMF-style programme on their own populations.
What has been happening in Europe – and indeed the US in a more muted and dispersed form – is nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war. In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives – childcare, education, health, unemployment, disability and old age.
The danger is not only that the new austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies – not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract.
2 France’s harshest budget in 30 years (The Guardian) To the dismay of a swath of French bankers, business leaders and the wealthy, President Francois Hollande has remained true to his word and unveiled €20bn in new taxes, including a 75% "supertax" band that will hit the rich. In what Hollande has described as France's harshest budget in 30 years, business and personal taxpayers were asked to make an "unprecedented effort" to slash the country's public spending deficit. However, the Socialist government sidestepped swingeing cuts in public spending, including pensions and state salaries, in its 2013 budget, which aims to find €36.9bn in savings.
The budget was a delicate balancing act in which Hollande sought to reassure investors and the financial markets, while simultaneously hiking taxes on large businesses and high-earners. However, it commits the government to an austerity programme that will be unpopular with leftwingers in the party, at a time when unemployment is rising and the economy teeters on the brink of recession.
3 UK’s AAA credit rating at risk (The Guardian) The UK has come a step nearer losing its AAA credit rating after one of the big three ratings agencies warned that rising debts and slowing growth jeopardised its status as a safe haven for investors. Fitch said the likelihood of a downgrade had increased after the economy's poor performance over the last year during which it has slipped back into recession. The ratings agency pointed out that the UK had a debt mountain second only to the US among those countries with a AAA rating and was nearing the upper limit the agency set for the most creditworthy countries.
"Fitch now expects the economy to contract by 0.3% in 2012 compared to an expectation of growth of 0.8% when the UK sovereign rating was last formally reviewed in March 2012. It added: "The weaker than anticipated economy is reflected in lower corporate tax returns and higher public sector net borrowing. The US was downgraded by rival ratings agency Standard & Poor's last year, but retained its AAA rating with Fitch and Moody's.
4 Spain needs $76bn to recap banks (The New York Times) Spain’s ailing banking industry could need as much as $76.4 billion, in additional capital, according to an independent banking assessment. The report paves the way for Madrid to request bank rescue loans that European finanche number was within the range of previous estimates and well below the potential 100 billion euros, or $128.8 billion, in bailout money that Spain negotiated with other euro zone countries in June.
I’m giddy these days since Oscar came into my life. Caring for a pet is a welcome distraction from the day-to-day reality of being a cancer patient. In the short time Oscar has been in my life, he’s had an effect on my relationships. Rather than staring at my bald head, passers-by stop to play with Oscar and to tell me how cute he is. It is a sign of my progress that I’m allowed to be around a dog at all. My immune system is getting stronger, my doctors tell me. Oscar can’t change what’s going on in my bone marrow. But I can feel that he’s already working magic.
6 Punjab’s drug problem (Dawn) In the 1970s, Punjab was regarded as India’s “bread basket”, due to its fertile soil, prosperous farmer community and booming agricultural output. Some, like former addict Navneet Singh, see the growing appetite for drugs as “a problem of abundance.” Singh, a successful restaurant owner who has been clean for 11 years, grew up in a wealthy family. He believes that Punjab’s relative affluence and its cultural norms, coupled with the easy access to drugs, make addiction a commonplace reality. “What does the Punjabi do when he gets rich? He buys an SUV, a gun and he gets high,” he said. “Then as time passes and you get addicted you will do anything to support the habit,” he added.
Doctor J.P.S. Bhatia has witnessed the problem of addiction in Punjab from close quarters. When the psychiatrist set up his hospital in 1991, he would see one or two drug-related cases a week. Today, out of the 130 patients he sees every day, some 70 to 80 per cent are battling drug addiction, he tells AFP. The Amritsar neighbourhood of Maqboolpura has lost so many young men to overdoses or drug-related illnesses, that it is locally known as “the village of widows”.
7 Poverty in South Asia (Dawn) Poverty in Pakistan is a multifaceted problem – deeply rooted in its socio-political and economic structure of governance, asserts the annual report of the Mahbub ul Haq Centre launched in Lahore last week. The centre’s ‘Poverty of Opportunity Index’ estimates that 29.2% of the country’s total population, or more than 52.5 million people out of 180 million, live in poverty. The index shows countries like India, performing better with respect to poverty of education opportunities, have a lower incidence of poverty (27.8%) as measured by poverty of opportunity index in spite of suffering from a greater incidence of calorie-based income poverty.
Out of the four South Asian countries ranked in the index, only Bangladesh fares worse than Pakistan with its 35.2% population living in poverty. Sri Lanka has a remarkably low incidence of poverty of 7.8%, indicating its commendable performance with respect to provision of education, health and income opportunities to its people.
8 Around the world, 215m children work full-time (Straits Times) According to the International Labour Organisation, there are around 215 million children working. Many of them work full-time and do not receive proper nutrition and care. Universal Children’s Day will be marked on Nov 20.