CEOs urge tax hikes, spending cuts; South Korea slows; The menace of slavery; Euro survives, but future is shaky; Chinese leader has billions in hidden wealth

1 CEOs urge tax hikes, spending cuts (San Francisco Chronicle) CEOs from more than 80 major US companies are pressing Congress to reduce the federal deficit by raising taxes and cutting spending. They warned that the uncertainty spawned by the deficit, which has topped $1 trillion for four consecutive years, is dampening businesses' hiring and investment and stifling the fragile economic recovery.

The CEOs said the solution requires a combination of higher taxes and reduced government spending including on entitlement programs such as Medicare and Medicaid. They also seek federal investment in infrastructure and math and science education. "What it really comes down to is if we still have the political will to be a great country," Dave Cote, chairman and CEO of Honeywell International, said in a statement. The group endorses the proposals of a special bipartisan commission that called for about $3 in spending cuts for every $1 in tax increases to save around $4 trillion.

2 South Korea economic growth slows (BBC) South Korea's economy grew at its slowest pace in nearly three years as the global slowdown hurt demand for its exports and firms cut their investment. The economy grew at an annual rate of 1.6% in the July to September quarter. That is down from 2.3% in the previous quarter. Compared with the previous three months, the economy expanded by 0.2%.

South Korea has cut interest rates to spur growth and the weak data may prompt it to take further measures. The Bank of Korea cut interest rates twice in the past four months. The latest of those cuts, announced earlier this month, saw the key lending rate lowered to 2.75% from 3%. 

3 The menace of slavery (Jonathan Power in Khaleej Times) There are more people in slavery today than in any time in human history. The best estimate is 27 million, and that does not include bonded labour. This is more than double the total taken from West Africa during the transatlantic slave trade in the 16^th, 17^th and 18^th centuries. However in percentage terms it is smaller than the African slave trade — with today’s massive global economy it has become only a tiny fraction of the whole.

US President Barack Obama has talked about how it works in the modern world. “It’s the migrant worker unable to pay off his debt to his trafficker. The man, lured here with the promise of a job, his documents then taken, and forced to work endless hours in a kitchen. The teenage girl beaten, forced to walk the street”.

Slavery takes many different forms. In Niger in central Africa girls and women of the “slave cast” are bought and sold as unofficial wives. They are referred to as “fifth wives” as they are additional to the four wives the law allows. Since they are not officially married they have none of the legal rights due a married woman. Thus they are exploited for domestic labour and sexual gratification. In Ghana young boys are brought by traffickers from interior African states to work in harvesting cocoa pods. They have no rights at all, rarely see their families again and are paid peanuts.

In India it is common. In Delhi it is found in the work of beautifying cloth-attaching sequins, beads and embroidery to garments to be sold often in international markets. According to the London-based Anti-Slavery Society, well known brands have been involved in marketing these products. 
International publicity has led to India making a more serious attempt to enforce its child labour laws and only recently passed a law strengthening the penalties. But it is not easy to enforce.

Despite this gloomy reporting there is an air of optimism among many of experts. The International Labour Organisation talks about the growing leadership on the part of key importing countries to take action. According to a BBC report, Kevin Bales of ‘Free the Slaves’ says, “Slavery is standing on the edge of its own extinction — if we give it a hard push. We need governments to work together and to enforce their own laws. But that’s do-able. It is a solvable problem within our generation.” So it should be — and in much less time than that.

4 Euro survives, but future is in doubt (Floyd Norris in The New York Times) Remember the euro crisis? Only a few months ago, it was front-page news. But in this week’s foreign policy debate between President Obama and Mitt Romney, the euro never came up. Europe was mentioned once, but the reference had nothing to do with economics. To a surprising extent, the perception seems to be that the European situation is under control. That is true if all you worry about is whether bondholders will get paid. It is false if you have a broader perspective.

The focus of the last couple of years on borrowing costs for peripheral members of the euro zone was, in retrospect, unfortunate. It was always clear that Europe, as a whole, had the ability to solve that issue if it wished to do so. The European Central Bank, like the US Federal Reserve, has the ability to print money, and that is what it finally did. But the real issue was — and remains — whether the peripheral countries could turn into successful economies while staying in the euro zone. On that issue, progress is painfully slow. 

5 Chinese leader has billions in hidden wealth (David Barboza in The New York Times) The mother of China’s’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a speech last year. But now 90, the prime minister’s mother, Yang Zhiyun, not only left poverty behind — she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show.

The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China’s ruling elite, first in 1998 as vice prime minister and then five years later as prime minister. Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion. 

In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners. Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China’s fast-growing economy. 

6 Ford shuts two European units (The Guardian) Britain's mixed economic recovery was starkly illustrated on Thursday as Ford closed two sites with the loss of up to 1,400 manufacturing jobs, while Debenhams lifted the mood of embattled high street retailers by announcing plans for 17 new department stores. The contrasting news underlined the difficulties facing George Osborne as he targets a rebalancing that will divert GDP growth away from debt-fuelled spending towards exports.

Ford gave a jolt to those plans on Thursday by signalling an end to more than a century of vehicle production in the UK. The US carmaker is closing its Transit van plant in Southampton and a panel-stamping operation in Dagenham next summer, 102 years after starting production of the Model T in Manchester. Ford will still produce and design engines in the UK but the Unite trade union described the shutdowns as "disgraceful".

Ford confirmed that the economic reality for mass-market car producers is a retrenchment that will cost thousands of manufacturing jobs across the continent, with the US firm shedding 6,200 positions in Europe this week alone. It is the latest mass-market automotive business to restructure its European operations as carmakers seek to eradicate a glut of capacity amid falling sales, which have left manufacturers with too many plants and too little demand.