Sunday, December 30, 2012

Apocalypse avoided, but 2013 will be no picnic; UN wants India to protect women; Wasted life of India gang-rape victim

1 Apocalypse avoided, but 2013 will be no picnic (Ha-Joon Chang in The Guardian) The world did not end this year, as some people thought it would following a Mayan prophecy, but it seems pretty certain that next year is going to be tougher than this one. We are entering 2013 as the Republican hardliners in the US Congress does its utmost to weaken the federal government, using an anachronistic law on federal debt ceiling.

Since its enactment in 1917, the ceiling has been raised nearly a hundred times, as a ceiling set in nominal monetary terms becomes quickly obsolete in an ever-growing economy with inflation. Had the US stuck to the original ceiling of $11.5bn, its federal debt today would have been equivalent not even to 0.1% of GDP (about $15tn) – the current debt, which is supposed to hit the $16.3tn ceiling today, is about 110% of GDP.

On the other side of the Atlantic, the eurozone is entering a make or break year, with the social fabric of the periphery countries stretched to the limit. With its GDP 20% lower than in 2008, with 25% unemployment rate and with the wages of most of those still in work down by 40% to 50%, it is a real touch and go whether the current Greek government can survive another round of austerity. Spain and Portugal are not yet where Greece is, but they are hurtling down that way.

For the UK, 2013 may become the year when it sets a dubious world record of having an unprecedented “triple-dip recession”. Even if that is avoided, with high unemployment, real wages that are at best stagnant and swingeing welfare cuts, many people will struggle to make ends meet.

Things look brighter in the Asian countries, with their economies growing much faster. However, they – especially the two giants of China and India – have their own shares of social tension to manage. Growth is slowing down in China. It is estimated to have grown by 7.5% in 2012, well below the usual rate of 9% to 10%. Management of social tension will be an even bigger challenge for India. Its economic growth has significantly slowed down since 2010, and few predict a major reversal of the trend in 2013. Add to this economic difficulty deepening economic, religious and cultural divisions, and you have a heady mixture.

If the political leaders of the major economies do not manage these social tensions well, 2013 could be a year in which the world takes a turn for the worse. It is a huge challenge, as it is like trying to fix a car while driving it. However, without fixing the malfunctioning car, we will not get out of the woods, however much extra fuel, like quantitative easing, we pour into the car.

2 UN wants India to protect women (Jason Burke in The Guardian) UN secretary general, Ban Ki-moon, has urged the Indian government to take action to protect women after a 23-year-old student died of injuries sustained during a gang rape in Delhi. "Every girl and woman has the right to be respected, valued and protected," Ban said in a statement in which he welcomed efforts by the government but called for "further steps and reforms to deter such crimes and bring perpetrators to justice".

The intervention of the UN takes the fallout from the incident two weeks ago to a new level and underlines the damage it has done to India’s international image, already battered by corruption scandals, a huge power failure earlier this year, and slowing economic growth.

Prime minister Manmohan Singh, and Sonia Gandhi, the president of the ruling Congress party, with other senior Indian politicians, have been heavily criticised for their slow and high-handed response to the incident, which has generated outrage, grief and anger across the country. "It's been a huge challenge to all of them. They have seen the whole affair as basically a law and order problem. There has been no conversation," said Swapan Dasgupta, a Delhi-based analyst.

Figures published on Sunday revealed that despite 635 reported cases of rape and 745 arrests in Delhi this year, there had been only one conviction. A total of 572 rapes were reported to Delhi police in 2011, up from 507 in 2010, 469 in 2009 and 466 in 2008. The government has said it will bring in fast-track courts to accelerate the legal process.

India's courts have a backlog of hundreds of thousands of cases, which would take decades to clear if all were heard. Facilities for forensic analysis are few and poorly equipped. Healthcare in many of the rural areas where assaults are endemic is often rudimentary. The UN has offered to help India "strengthen critical services for rape victims" with "technical expertise and other support as required," Ban said.

3 Wasted life of India gang-rape victim (Ravi Velloor in Straits Times) In life, perhaps, the Indian woman gang-raped so brutally in New Delhi, may have one day travelled to Singapore on the credentials she was gathering-- a diploma in physiotherapy. Indeed, she may well have been employed in Mount Elizabeth Hospital, where paramedical staff are drawn from all parts of Asia. It wasn't to be.

Would her death go in vain? Prime Minister Manmohan Singh has called for the emotions unleashed by her passing to be channelled into "a constructive course of action." That is easier said than done. India's national capital recorded 635 rapes this year alone - a rape every 14 hours - and that is just the number that are reported.

In a culture fixated on the male child - May You Be the Mother of a Hundred Sons is the title of Elisabeth Bumiller's classic on the life of Indian women - when a third of Indian legislators have faced criminal charges, when aggressive behaviour towards women doesn't fetch in New Delhi the same outrage as it would, in say, Kolkata, reining in the predatory instincts of the northern Indian male will not be easy.

Until the ordinary Delhi male turns indignant at the sight of a fellow man molesting a woman, and acts to stop him, the problem will not go away. No police force in the world has the manpower to post marshals on every bus and train in the city.

Friday, December 28, 2012

For workers, hard year of slog in 2013; China orders -- Visit your parents; India -- Another day, another rape; How much more can India take?

1 For workers, hard year of slog in 2013 (The Guardian) Workers can expect longer hours, a continued squeeze on pay and fewer jobs being created in a "hard year of slog" in 2013, a report has warned. Job insecurity will remain high, with workers maintaining a "grin and bear it" attitude, said John Philpott, director of The Jobs Economist.

Unemployment is forecast to increase by 120,000 to 2.63 million in 2013 because growth in the workforce will exceed the number of jobs being created, Philpott said. Youth unemployment is forecast to fall below 900,000, while long-term unemployment will remain broadly the same, the report said. Pay deals will continue to be affected by unemployment, with pay increases lagging behind inflation, leading to wage cuts for workers.

Philpott said he expected only limited support from workers in private firms for union opposition to public sector cuts. "Workplace disgruntlement in the private sector will instead take the form of simmering distrust of bosses, especially those who adopt the trendy management speak mantra of 'employee engagement' while piling the pressure on overstretched staff," he said.

2 China orders – Visit your parents (Johannesburg Times) Visit your parents. That’s an order.  So says China, whose national legislature on Friday amended its law on the elderly to require that adult children visit their aged parents "often" - or risk being sued by them. The amendment does not specify how frequently such visits should occur. State media say the new clause will allow elderly parents who feel neglected by their children to take them to court.

A rapidly developing China is facing increasing difficulty in caring for its aging population. Three decades of market reforms have accelerated the breakup of the traditional extended family in China, and there are few affordable alternatives, such as retirement or care homes, for the elderly or others unable to live on their own.

3 India: Another day, another rape (Khaleej Times) After India recently witnessed one of its most horrific rape cases, the hitherto apathetic public decided not to let the incident slip as just another sexual crime in a sprawling metrapolis. Despite the freezing cold, Indians battled batons and water cannons in recent weeks to pressurise their leaders to guarantee safety for women in Delhi. Overtly, their tactics seemed to have worked; major figures of the ruling Congress party — Congress party president Sonia Gandhi, Delhi chief minister Sheila Dikshit and home minister Sushil Kumar Shinde — have assured that the authorities are keen to improve security in metropolitan areas to prevent such heinous crimes.

But it seems like the government is failing to honour its lofty promises. In another disturbing incident, the Delhi police reported the case of a 42-year-old woman who was kidnapped, drugged and gang raped in a car by three men from Uttar Pradesh, before being dumped in southeast Delhi.
And this is not it. A 17-year-old girl, who was abducted from Patiala, Punjab, drugged and then repeatedly raped, subsequently committed suicide after the police pressured her to drop her case and marry one of her attackers. This time around, it’s clear that the authorities will not have it easy. The government will have to do more than just make tall claims and earnest vows to appease India’s agitated masses. They want better security for women, and they won’t stop their strident chants till they get it.

4 How much more can India take? (Paul Beckett in The Wall Street Journal) It was an act against a young person that, even by the grisly standards of the daily crime pages, was so horrendous that people were outraged. This was the story of “Baby Falak,” the two-year-old girl whose plight gripped the nation earlier this year as she battled for life then succumbed to her injuries. The victim of a gruesome sexual assault on a bus in New Delhi on Dec. 16, who died early Saturday, was 21 years older than Falak. But their stories, the public confrontation they unwittingly prompted, and the grief that they generated in their passing have much in common. And both incidents, happening in the nation’s capital within 12 months of each other, beg the question: What will it take to change?

In both cases, the public felt a deep connection to the victim. They monitored, via the breathless coverage of 24-hour television news channels parked outside the hospital, their medical roller-coaster. For a while, in both cases, doctors sounded cautiously optimistic about a recovery. Falak was dubbed “India’s Baby.” The young woman became “India’s Daughter.” As they struggled to live, their plights attracted attention worldwide.

It will not be enough simply to yell at the political class and the guardians of our collective safety then throw up our hands in disgust. Rather, it will take massive – yes, massive – reforms. Of the police , in terms of the number of officers on the street, the training that those officers have, and whatever incentive — positive or negative — that they need to take crimes against women seriously.

Of the legal system, so that when another rape occurs, the public is confident that the wheels of justice will move swiftly and effectively. Of the political class, which needs to respond faster and less defensively while, judging by the standards of the president’s son, engage in a wholesale change of attitude toward those who would criticize them.

Of India’s chauvinistic men, many of whom clearly see women as inferior and see no issue, therefore, in abusing them without fear of consequence. All that will take engagement at a time when the overwhelming temptation for many will be to fume on Twitter then mentally withdraw. Politicians must engage, too. And, if they don’t, they must be punished in the only way that they appear to understand: Removal at the ballot box, where voters have a recurring chance to prove that they don’t forget.

Thursday, December 27, 2012

German austerity may beggar Europe; South Korea cuts growth forecast; A year to forget for India Inc

1 German austerity may beggar Europe (Costas Lapavitsas in The Guardian) Has the eurozone crisis ended? Many politicians in Europe, including France's president Francois Hollande, seem to think so. Well, not so fast. Far from ending, the crisis is yet to reach its most difficult phase.

It is easy to see why politicians claim the crisis is over. Greece has just been promised another €50bn, provided it accepts still more austerity, deregulation and privatisation. Elsewhere in the periphery, Ireland is in its sixth year of recession, Portugal is heading for major economic contraction, and Spain is going from bad to worse – but their governments are imposing austerity, and people appear to be putting up with it. Even core countries, including Italy and France, have accepted the need for balanced budgets. Across the eurozone, there is no effective opposition to the mantra of austerity emanating from Berlin.

But austerity and calmer financial markets do not amount to ending the crisis. Rather, they point to the emergence of a German eurozone. Commentators who have protested that crisis leadership in the eurozone has been weak have been wide of the mark. In practice, austerity is transforming the periphery into a vast East Germany: a zone of weak growth, low wages, poverty and no economic dynamism. There will not even be some of the fiscal transfers, amounting to perhaps €60bn annually, that have supported East Germany.

The most telling piece of evidence of the emergence of a German eurozone has been the reluctance to confront the deeper cause of the crisis, namely the divergence in competitiveness between – mostly – Germany and the rest. German gains in competitiveness have not been due to greater efficiency, but are a result of the fact that Germany has systematically undershot the eurozone inflation target, while other countries have either hit, or overshot it thanks to the wage restraint imposed on its workers, harsher than elsewhere. Over the years a great gap has emerged between Germany and the rest, especially the periphery, whose competitiveness has collapsed.

The solution would be for Germany to rebalance its economy by strengthening domestic demand. Instead, Berlin's reliance on exports has grown: in 2012 the contribution of its domestic economy to growth will be zero. The eurozone is becoming a vehicle for German mercantilism, whereby the German people are first beggared in order subsequently to beggar others.

2 South Korea cuts growth forecast (BBC) South Korea has cut its growth forecast for this year and for 2013, underlining the effect of a slowdown in its key export markets on its growth. The finance ministry has forecast a growth of 3% for 2013, down from its earlier projection of 4.3%. South Korea's exports, which account for almost half of its overall economy, have been hit by slowing demand from markets such as the US and eurozone.

"Growth next year will be better than this year, although there are significant downside risks," said the finance ministry's Choi Sang-mok. The sovereign debt crisis in the eurozone has hurt demand for South Korean exports from the region.  Meanwhile, the economic recovery in the US - another key market for its exports - has also remained fragile and consumer demand there has not picked up drastically. 

The slowdown in demand for exports has hurt growth in Asia's fourth largest economy. South Korea's economy grew at its slowest pace in three years in the July to September quarter, expanding at an annual rate of 1.6%.

3 A year to forget for India Inc (Khushita Vasant in The Wall Street Journal) For corporate India, 2012 can’t end soon enough. India’s economy is growing at its slowest pace in a decade, taking its toll on the profits and expansion plans of companies. In addition, there were several events this year which hurt India’s image as an attractive business destination.

Here are some events that India Inc. would prefer to forget: Retroactive tax plan. Foreign investors were spooked about investing in India when India said it planned to retroactively tax some international mergers. The proposal seemed to be the government’s effort to override a Supreme Court ruling. In January, India’s highest court ruled that India’s tax authorities didn’t have the jurisdiction to tax Vodafone of the UK for a 2007 purchase of an Indian cellphone company because the deal was between two foreign entities. The idea that such deals could now be retroactively taxed, raised questions about the credibility of India legal system and of the government. Foreign investors balked from putting money into India for several months.

Rupee’s decline: The rupee’s slide, which started in late 2011, continued this year with the currency touching its lowest-ever rate against the dollar in the summer. On June 22, the rupee was trading at 57.33 to the dollar, a decline of 21% over the previous 12 months.

Maruti Suzuki riots: A labor agitation that turned violent at Maruti Suzuki India factory raised concerns about work safety and security in India. Telecom trouble: A scandal over the allotment of second generation or 2G telecom licenses to Indian mobile phone companies spilled over into 2012, hurting the telecommunications industry.

Mallya’s malady: If there’s anyone wishing that 2012 ends quickly, it must be Vijay Mallya, owner of the once high-flying Kingfisher Airlines Ltd. Kingfisher hasn’t made a profit since it was founded in 2005, but this year its financial health deteriorated further, amid high interest charges and high fuel costs. As of the end of November, Kingfisher owed more than $36 million to the government in taxes.

Wednesday, December 26, 2012

Clueless eurozone; Top three economies to stay atop for a decade; The beast in Delhi's belly; A thousand road deaths in SA holiday season

1 Clueless eurozone (MN Hebbar in Khaleej Times) As European leaders go home for the Christmas festivities, they would take back with them memories of the role played by Germany in moderating the course of the debt crisis throughout the year and preventing matters from precipitating a collapse of the euro and thus of the eurozone.

As we head into 2013, Europe would carry forward its unfinished agenda and also confront new and perhaps explosive issues – such as the recent threat by Britain’s Prime Minister David Cameron to opt out of the EU next year.

The majority of European leaders reckon with the return of Angela Merkel in the 2013 German elections to avail of Germany’s continual influence. An informal vote taken by European politicians for the ‘star’ performer in EU and eurozone politics has fallen on Merkel as the ‘Euro’ star of 2012!

2 Top three economies to stay atop for a decade (Larry Elliott in The Guardian) Britain moved up to sixth in the global economic league table during 2012, overtaking Brazil despite a year of flatlining activity. A survey from the Centre for Economic and Business Research (CEBR) found that the value of the UK's national output surpassed that of Latin America's biggest economy following a fall in the value of its currency, the real.

The CEBR said it would take until 2014 for Brazil to once again supplant the UK in its World Economic League Table (WELT), and that by 2017 Britain would also have fallen behind a fast-rising India. Douglas McWilliams, CEBR chief executive, said: "The Indians have lost to us at cricket this winter but they are on track to beat us at economics. By 2017 we predict that the Indian economy will be the largest economy in the Commonwealth, overtaking the UK economy.

The five biggest economies in the world in 2012 were the same as in 2011, with the US followed by China, Japan, Germany and France. The CEBR said that the three top spots would remain unchanged for the next decade, although China's economy would by then be 83% as big as America's and catching up fast. By 2022, the report said India would be the fourth biggest economy in the world, with Russia up to seventh and bigger than every country in Western Europe apart from Germany. Britain will be the eighth largest economy followed by France.

3 The beast in Delhi’s belly (Esmerelda Jelbart Wallbridge in The Sydney Morning Herald) In a hospital in the south of Delhi, a 23-year-old woman clings to life, after a trip home from the cinema became a living nightmare. Brutally raped and beaten on a bus by a gang of six men, her naked body was then thrown from the moving vehicle. Her future is uncertain.

The incident has captured the attention of the nation. "Delhi's SHAME!" screams one headline. "Save women, save India!" shouts a protester and poster at India Gate. There have been strident calls for the death penalty for the perpetrators and a groundswell of support for the introduction of capital punishment for convicted rapists. India is in crisis. The awful tragedy is that there is nothing extraordinary about what happened on that bus. Women in India are in grave danger, suffering in a culture where sexism and misogyny lead to horrific violence against women.

I have been travelling in India since early August and based in Delhi for the past few months. Overwhelmingly, I have loved my time here, but I have not felt safe. From research released earlier this year that found India to be the worst OECD nation for women, to my conversations with women who live here, to my personal experiences, I am convinced that India is the worst country on earth in which to be a woman. 

When I arrived in Delhi, the first thing I noticed was the staring and leering. Conversations with girlfriends and older women warned against the perils of crowds. My experiences are filtered through the lens of my privileged position in Indian society. Protected by my comparative wealth and by my nationality, I am in a far better position than most.

At a time when Australia is making its largest concerted effort to strengthen bilateral ties with India and pundits are pointing to all the points of convergence (democratic values, shared love of cricket, common language, mutual gains from trade) it is important that we make a clear-eyed assessment of the status quo. If we as a nation are to embrace India fully - as I think we ought - we must disavow any form of cultural relativism when it comes to this issue. We must apply pressure, in whatever way possible, to call for change.

4 A thousand road deaths in SA holiday season (Johannesburg Times) The Road Traffic Management Corporation (RTMC) on Tuesday said the number of people killed on South Africa's roads was estimated to be more than 1 000, according to a report. RTMC spokesman Ashraf Ismail said that the national death toll was at this stage likely to be over 1,100.

Authorities in the Western Cape say the province's road death toll has risen to 142 since the beginning of December. Provincial traffic chief Kenny Africa said the figure was 15 fatalities more than what was recorded last year, and warned that traffic officers would clamp-down on all road offenders. Transport Minister Ben Martins over the weekend urged motorists travelling on South Africa's roads during the festive season to prioritise life above personal convenience, the department said.