Tuesday, December 31, 2013

Global economy to grow faster in 2014; Job cuts for HP, Revlon; When a movement became government in Delhi

1 Global economy to grow faster in 2014 (Nouriel Roubini in The Guardian) The global economy had another difficult year in 2013. The advanced economies' below-trend growth continued, with output rising at an average annual rate of about 1%, while many emerging markets experienced a slowdown to below-trend 4.8% growth. After a year of subpar 2.9% global growth, what does 2014 hold in store for the world economy? The good news is that economic performance will pick up modestly in both advanced economies and emerging markets.

The advanced economies, benefiting from a half-decade of painful private-sector deleveraging (households, banks, and non-financial firms), a smaller fiscal drag (with the exception of Japan), and maintenance of accommodative monetary policies, will grow at an annual pace closer to 1.9%. Moreover, so-called tail risks (low-probability, high-impact shocks) will be less salient in 2014.

The threat, for example, of a eurozone implosion, another government shutdown or debt-ceiling fight in the US, a hard landing in China, or a war between Israel and Iran over nuclear proliferation, will be far more subdued. Still, most advanced economies (the US, the eurozone, Japan, the UK, Australia, and Canada) will barely reach potential growth, or will remain below it.

High budget deficits and public debt burdens will force governments to continue painful fiscal adjustment. And an abundance of policy and regulatory uncertainties will keep private investment spending in check. The outlook for 2014 is dampened by longer-term constraints as well. Indeed, there is a looming risk of secular stagnation in many advanced economies, owing to the adverse effect on productivity growth of years of underinvestment in human and physical capital.

Emerging economies will grow faster in 2014 – closer to 5% year on year – for several reasons. Brisker recovery in advanced economies will boost imports from emerging markets. The Fed's exit from QE will be slow, keeping interest rates low. Policy reforms in China will attenuate the risk of a hard landing. Still, some emerging markets – namely, India, Indonesia, Brazil, Turkey, South Africa, Hungary, Ukraine, Argentina, and Venezuela – will remain fragile in 2014, owing to large external and fiscal deficits, slowing growth, below target inflation and election-related political tensions. In sum, the global economy will grow faster in 2014, while tail risks will be lower.


2 Job cuts for HP, Revlon (BBC) Computer maker Hewlett-Packard and cosmetic firm Revlon have both announced end of year job cuts of thousands of workers. In a filing with US regulators, HP said it would cut 5,000 more jobs than planned. The firm now says it will eliminate 34,000 positions, or 11% of its workforce, by the end of 2014.

Separately, Revlon announced plans to leave China and said it would cut 1,100 jobs. Revlon, which manufactures cosmetics and hair dye under its name as well as the Almay and SinfulColors brands, said the cuts would save the firm around $11m a year amid declining global sales. The firm recently announced changes in its leadership, including naming a new boss, Lorenzo Delpani.


3 When a movement became government in Delhi (Amit Baruah in Dawn) The Aam Admi (common man) party in Delhi has fuelled the hope for a better India – a country where the Aam Aadmi – and not the VIP – counts for something. There’s little doubt that AAP’s appeal cuts across caste, class and religion; a departure from the vote bank politics which traditional political parties have tended to practice.

Established political parties like the Congress and BJP mocked AAP in the run-up to the Delhi elections just as they took pot-shots at the 2011 agitation, saying that let’s see you contest elections and capture the people’s vote. In Delhi, at least, all this has happened. Analysts also believe that AAP, which has taken support from the Congress to form the government after saying a clear no earlier, could go with the BJP in the event of a hung Lok Sabha next year.

As AAP’s plans to contest the parliamentary elections are awaited, it’s evident that the political space ceded by the Congress and BJP in Delhi is not restricted to the capital. The whole of India is open for AAP to capture. Already, AAP’s political machinery is being activated across the country and they have begun inviting candidates to contest the 2014 parliamentary polls. In the interim, there is the small matter of delivering in Delhi.

The party has promised a 50 per cent reduction in electricity bills and free water to households using less than 700 litres of water per day. Their manifesto also talks of setting up an anti-corruption ombudsman within 15 days of taking office. It’s not Delhi, but the whole of India that will be watching the delivery and performance of the Aam Aadmi Party. Best of luck, AAP.


China domestic debt surges 70%; 'Greece will leave bailout in 2014'; When the world turned the camera on itself

1 China domestic debt surges 70% (BBC) China has local government debts of 17.7 trillion yuan ($2.9tn), up 70% from three years ago, according to an official report. China’s government asked the National Audit Office (NAO) in July to do a round-up of the debts outstanding at a local level. The report showed some local governments were using new loans to repay more than a fifth of their debt. China has a total government debt of about 58% of its economic output.

Persistent fears over the level of non-performing bad debt have affected perceptions of the world’s second-largest economy, as some worry whether the loans can be paid back. The figure is still less than half the debt burdens in Japan – the world’s third-largest economy – and Greece, but some analysts warn that China’s debt cannot continue to grow at this pace forever.

According to the China Banking Regulatory Commission, local governments took up 80% of total bank lending in China at the end of 2010. Local governments in China borrowed heavily after the global financial crisis, to try to sustain growth rates. The Chinese central government has repeatedly stressed the urgent need to guard against financial risks, including the local government debt problem.

2 ‘Greece will leave bailout in 2014′ (Graeme Wearden in The Guardian) Greece will leave its bailout programme next year without needing a third aid package, the country’s prime minister, Antonis Samaras, announced, as he insisted that citizens could look to 2014 with confidence. Samaras told long-suffering Greeks that the end of the country’s financial assistance plan was in sight after almost four years of painful austerity, and that the new year would bring the prospect of normality.

Ireland left its bailout programme earlier this month, but a Greek exit would be a major milestone in the financial crisis that began to grip the eurozone in the spring of 2010. Greece has already received two aid packages, with around €130bn wiped off its debt in 2012.

Greece is expected to finally leave recession in 2014, and investor confidence in the country has grown through the last year. The yield, or interest rate, on its 10-year bonds has fallen to around 8% – compared with 30% at the peak of the crisis – as traders regained faith that the debt would be repaid. Greek government bonds were one of the best-performing assets in 2013, returning 47%.

Analysts, however, are sceptical of the claim that Greece will not need further aid next year. It has still not reached agreement with its international lenders over the size of its fiscal shortfall in next year’s budget, with troika officials pushing Athens to make further painful cutbacks. Record unemployment and pay cuts have pushed prices down across the country, and this punishing “internal devaluation” may continue in next year.


3 When the world turned the camera on itself (Khaleej Times) Self-portraiture has been around for centuries, but the global proliferation of smartphones with built-in digital cameras — plus the ability to share photos instantly on social media — has taken the genre to a new level. With 2013 coming to a close, the publishers of the hallowed Oxford English Dictionary declared selfie to be their “word of the year.”

“Selfie: noun, informal. A photograph that one has taken of oneself, typically one taken with a smartphone or webcam and uploaded to a social media website,” according to Oxford. “Also: selfy. Plural: selfies.” Internet search provider Yahoo meanwhile estimates that in 2014, about 880 billion photographs will be taken. That’s 123 photos for every man, woman and child on Earth. Many will be selfies. In Britain, a survey for Samsung found that 17 per cent of men, and 10 per cent of women, take selfies because “they enjoy taking good-looking photos of themselves.”

“I think ‘selfie’ is a term of endearment for the self, in a way,” said Sarah Kennel, curator of photography at the National Gallery of Art in Washington, who admits to taking the odd selfie herself. “It does reflect a kind of narcissism in our culture,” she said. US President Barack Obama and British Prime Minister David Cameron got tongues wagging when they took a selfie with Danish leader Helle Thorning Schmidt at Nelson Mandela’s memorial service in South Africa.

 “A selfie is a sort of perversion (and) a conquest of social virtual terrain,” said Paris-based travel photographer Jean-Francois Vibert. “Happily, perversion is not prohibited,” added Vibert, who namechecks the flamboyant pop star Nicki Minaj for selfies “so ‘trash,’ it’s self-mockery. On that level, the selfie is decadence for a totally decadent era.” Kennel said self-portraits are as old as photography itself.

Sunday, December 29, 2013

Why 2013 was an amazing year in tech; When data thieves and snooping captured our lives; Populism bubble bursts in India

1 Why 2013 was an amazing year in tech (Vivek Wadhwa in Sydney Morning Herald/Washington Post) If you go by the headlines, the iPhone 5S and Google Glass were the big technology stories of 2013, and Twitter’s IPO was the event of the year. But look again, at the stories we missed. So much happened, in fact, that I believe we have set the stage for the transformation of entire industries.

Smaller has become cooler in computers. Tablets sales continued to increase and have eclipsed PCs and desktops. The iPad mini, which at first seemed to be a disappointment, was a major success. Prices are continuing to plunge as computing power and functionality grow exponentially. Electric cars proved their mettle. Tesla achieved astonishing success. All major car manufacturers are now developing electric cars for a market that will surely grow.

Technology is improving health care. Quantified Self devices such as Fitbit and Nike Fuelband are becoming widely available. Smartphone add-ons such as the Alivecor heart monitor are being prescribed by doctors. Interestingly, Apple recently patented a heart monitor sensor for the iPhone. Our smartphones are destined to become our prime medical advisers. Rosie the Robot came one step closer to reality. Smartphones such as the iPhone 5S now have more computing power than the supercomputers of yesteryear, which fit into large buildings and required water cooling. 

It is noteworthy that Google just purchased robotics developer, Boston Dynamics, as well as seven others. With its self-driving car and these acquisitions, it seems that Google sees robots as big business. Amazon founder Jeff Bezos said Amazon plans to use robotic drones to deliver goods. Whether we realize it or not, the robotic revolution is underway. Robots have advanced to the point that for some types of goods, it is cheaper to manufacture in the US than China. 

The space race is on again. In 2013, India launched a spacecraft that is headed to Mars and China landed a six-wheel rover on the moon. Add to this the success that private companies SpaceX, Virgin Galactic and Moon Express have had and you realize that we are at the cusp of a new era in space travel. NASA once again has competition from governments abroad so there will be a new sense of urgency. 

Now let me give you the bad news: we still have a few more years of disappointment before we marvel at all these advances. The base of an exponential curve is flat. When it turns upwards, dramatic developments happen, but for the longest time nothing seems to change. This is where we are with robotics, sensors, artificial intelligence, synthetic biology, 3D printing and medicine – all of which are exponential technologies. The good news is that the wait will soon turn into amazement as well. I know because I live in a solar home and drive a Tesla electric car that I say is a spaceship that travels on land.

2 When data thieves and snooping captured our lives (John Naughton in The Guardian) Whatever else 2013 will be remembered for, it will be known as the year in which a courageous whistleblower brought home to us the extent to which the most liberating communications technology since printing has been captured.

Although Edward Snowden’s revelations initially seemed only to document the extent to which the state had exploited internet technology to create a surveillance system of unimaginable comprehensiveness, as the leaks flowed it gradually dawned on us that our naive lust for “free” stuff online had also enabled commercial interests effectively to capture the internet for their own purposes. We now know for sure that nothing that you do online is immune to surveillance, and the only people who retain any hope of secure communications are geeks who understand cryptography and use open-source software.

This is a big deal by any standards and we are all in Snowden’s debt, for he has sacrificed his prospects of freedom and a normal life so that the rest of us would know what has happened to the technologies on we now depend. We can no longer plead ignorance as an excuse for alarm or inaction.

Since politicians on both sides of the Atlantic insist that everything the NSA and GCHQ are doing and have done is/was done under legal authority and democratic (that is, political) control it follows that the excesses unveiled by Snowden are the consequences of political judgments and misjudgments. Which means that the only way back to more sensible regimes is also a political one. Ultimately, in other words, this is about politics, not technology.

3 Populism bubble bursts in India (Neeta Lal in Khaleej Times) The recent Assembly elections sent out an unambiguous message to the federal Indian government — populism is no substitute for good governance. All the populist measures the UPA government initiated — be it the MNREGA job scheme, farm loan waivers, cheap rations or the 22-US$ billion food security law which professes to feed 800 million Indians — could not avert its rout in four of the five key Indian states. The Congress has been shown the door for poor political leadership, a shifty approach to corruption and utter disregard for the wishes of the common man.

Ostensibly, the party’s approach was to bag votes with largesse at State’s expense rather than through its own administrative acumen. The result is for all to see. They seem to be forgetting that this pseudo-entitlements culture is reminiscent more of medieval rajahs handing out doles to commoners rather than a modern government in tune with its people’s aspirations.

Voters may not understand the complexities of economics, but they’re astute enough to know that cheap rations, free rice and free electricity deliver only short-terms gains.  What’s in it for us in the long haul? they seem to be asking now. How about generating employment for us by boosting industrial growth? How about better education for our kids by bringing the country’s colleges and universities at par with global standards? How about better transportation services? And more security for our women?

Electoral sops reinforce the idea that people need to be provided for and that they can’t fend for themselves. What could be more demeaning? This is an antediluvian mindset. Data compiled by independent agencies suggests that most populist measures, profligate and tardily implemented, have led to corruption. Resources cannot be squandered in the name of votes, particularly when people want only lasting benefits.

Thursday, December 26, 2013

UN compares net surveillance to apartheid; 'Airpocalypse' in China; French jobless at 3.29m

1 UN compares net surveillance to apartheid (Haroon Siddique in The Guardian) The UN human rights chief, Navi Pillay, has compared the uproar in the international community caused by revelations of mass surveillance with the collective response that helped bring down the apartheid regime in South Africa. Pillay has been asked by the UN to prepare a report on protection of the right to privacy, in the wake of the former National Security Agency analyst Edward Snowden leaking classified documents about UK and US spying and the collection of personal data.

The former international criminal court judge said her encounters with serious human rights abuses did not make her take online privacy less seriously. “I don’t grade human rights,” she said. “I feel I have to look after and promote the rights of all persons. I’m not put off by the lifetime experience of violations I have seen.”

She said apartheid ended in South Africa principally because the international community co-operated to denounce it, adding: “Combined and collective action by everybody can end serious violations of human rights … That experience inspires me to go on and address the issue of internet [privacy], which right now is extremely troubling because the revelations of surveillance have implications for human rights … People are really afraid that all their personal details are being used in violation of traditional national protections.”


2 ‘Airpocalyspe’ in China (Khaleej Times) The alarming increase in air pollution levels in Chinese cities and the spurt in the number of lung cancer cases in the country have forced many local authorities to impose curbs on new car registrations. Tianjin, a city with nearly 15 million people and about 2.35 million registered vehicles, is the latest to crack down on new registrations. Authorities in the coastal city near Beijing will not issue more than 100,000 new car plates a year.

Other Chinese cities including the capital Beijing, Shanghai, Guiyang and Guangzhou have slapped such curbs on new vehicle registrations. With a population of 20 million and with more than 5.3 million vehicles on its roads, officials in the Chinese capital decided to issue just 240,000 car registrations through a lottery every year. Guangzhou, a city of 16 million people — with 2.4 million cars on its roads — also imposed a ceiling of 120,000 new registrations of small and mid-sized cars.

In October, the authorities had to virtually shut down the northeastern city of Harbin following an ‘airpocalypse’, when readings of fine particulate matter 2.5 (PM 2.5, which refers to particles smaller than 2.5 microns in diameter, and considered to be among the worst pollutants) touched a shockingly high level of 24-hour exposure of 1,000 micrograms per cubic metre in some parts of the city, which is about 4,000 per cent higher than the WHO’s recommendations of 24-hour exposure of 25 micrograms per cubic metre.

Beijing too suffered an ‘airpocalypse’ earlier in the year when the PM 2.5 reading almost touched the 1,000-mark. The US Environmental Protection Agency has an air quality index of just 500; anything above it is classified as being in the ‘beyond index’ category. Many Chinese cities now routinely report pollution levels in this category. The American agency describes any reading higher than 300 as an emergency condition. With such nasty air pollution levels, authorities in China have a major clean-up task on hand.

3 French jobless at 3.29m (Straits Times) France’s number of registered jobseekers rose by 17,800 in November to 3.29 million, the labour ministry said, challenging government claims to have bucked a trend of spiralling unemployment. Labour Minister Michel Sapin claimed President Francois Hollande’s pledge to curb growing joblessness by the year’s end was still on track, if part-time and short-term workers were added to the total number of jobseekers.

That number actually fell by 6,900 to 4.87 million if those workers were factored in, prompting Mr Sapin to say that the reversal of the upward trend is “well and truly under course in the fourth quarter.” “The number of jobless will continue to decrease in the coming months,” he said. A slight fall in the number of unemployed for October, of 20,500, had raised government hopes France’s years-long jobless crisis may be finally drawing to an end.

Wednesday, December 25, 2013

China 2013 growth likely at 7.6%; Magic words in the workplace; The common man's rule in Delhi

1 China 2013 growth likely at 7.6% (Straits Times) China’s economic growth is likely to come in at 7.6 percent this year, down slightly from 7.7 percent in 2012, the official Xinhua news agency quoted a report from the country’s Cabinet as saying.

The forecast was made in a mid-term evaluation report on the implementation of the 12th five-year plan to 2015, according to Xinhua.

2 Magic words in the workplace (Ronald Alsop on BBC) To repair damaged relationships with employees, these executives decided to say two of the toughest words for many bosses to utter: “I’m sorry.” Such mea culpas seem to be more common these days, partly because of the growing likelihood of a public uproar on social media when companies slip up. Whatever the motivating factor, contrition is good for more than just the soul. Apologies can help restore a manager’s credibility after a damaging error, and they also can inspire greater trust in management at a time when many workers are feeling disillusioned with employers. 

Honesty clearly is the cornerstone of trust, and that includes owning up to mistakes and apologising. Some respondents to a UK study said they would admire leaders if only they admitted their mistakes. Beyond engendering trust, acknowledging an error and making amends can encourage greater openness throughout an organisation. “When leaders admit mistakes, its shows they’re human and vulnerable, and it makes it safe for others to talk about their mistakes, too,” said Dennis Reina, president of the Reina Trust Building Institute, a consulting firm based in Stowe, Vermont.

How common are apologies from bosses? It depends on whom you ask. Many employees believe managers don’t take responsibility for their screw-ups and don’t express regret. Only 19% of employees said their managers often or always apologise. But managers have quite different perceptions of their behaviour: 87% said they often or always say they’re sorry. But some managers said they don’t apologise because they don’t want to look weak or incompetent.

Employers shouldn’t expect apologies to work magic in every situation. They may not be very beneficial when office relationships were already badly strained before the mistake occurred. “If the management enjoys high levels of trust from workers, then apologising is a good idea and more likely to be believed” and lead to forgiveness, said Jin Li, an assistant professor of management and strategy at the Kellogg School of Management at Northwestern University, who has studied trust issues in the workplace.

3 The common man’s rule in Delhi (The Wall Street Journal)  On Tuesday, the upstart Aam Aadmi, or Common Man, Party unveiled the team that would lead the Indian capital, a seven-member cabinet with Arvind Kejriwal, the anticorruption campaigner-turned politician, at its helm. Mr. Kejriwal, 45, will swear in as New Delhi’s chief minister this week, one of the youngest to do so in the history of Indian politics. The Aam Aadmi Party, of which Mr. Kejriwal is founder, thrashed political bigwigs to place second in state polls earlier this month, securing 28 out of 70 assembly seats.

Here’s how Indian newspapers responded to AAP’s decision to form a government in New Delhi: Headlined “Transformational politics,” an editorial in The Hindu described the AAP’s political debut as one “without a parallel in Indian electoral history.” The people’s mandate to the party, it said, reflected “popular yearning for change from the models of governance on offer today.”

 “AAP had little choice but to take the plunge,” an editorial in The Times of India read. “Having transformed itself from a public movement to a mainstream political party, it could hardly make a virtue of sitting in the opposition,” it added. Still, it cautioned that the party “must choose its battles carefully.”  The Hindustan Times said in an editorial, “Given the manner in which the AAP has attacked all political parties, accusing them of betraying the trust of the people, it will have to deliver on its promises double quick once it takes over the government. Therein lies the rub”.

In an editorial headlined “Chief Minister Kejriwal,” the Indian Express noted that AAP’s tenure will be far from a smooth ride. “The task of governance, it will find, is not about pleasing everyone all the time, but of weighing competing claims, making choices and taking responsibility for them,” the piece said. But “whichever way it goes, by choosing to take the plunge, the AAP has enriched the possibilities of this democratic moment,” the piece concluded.

Monday, December 23, 2013

Dumping India's 'VIP culture'; End of China's one-child policy; AK-47 founder Kalashnikov no more

1 Dumping India’s ‘VIP culture’ (Jason Burke in The Guardian) The former tax inspector and activist who is to be Delhi’s new chief minister, the top elected official in the metropolis, has refused police protection, saying that his “biggest security” is God. Arvind Kejriwal, leader of a new populist political party “dedicated to improving the lot of the common man”, announced on Monday that he would form a government to run the sprawling, troubled and increasingly wealthy city of 15 million people.

The 45-year-old novice politician, who has vowed to end the “VIP culture” of the capital, also said that new ministers would refuse to accept the large government bungalows that are customary perks of such posts as well as cars that use flashing red beacons to force their way through traffic. Even minor dignitaries in the capital travel with a large police escort, adding to the already acute congestion and enraging ordinary citizens.

Kejriwal’s Aam Admi (common man) party stunned political analysts and established parties when it won 28 out of 70 seats in local assembly elections in Delhi earlier this month. The newcomer to the capital’s cutthroat machinations, who launched his party a year ago, beat the former chief minster of the city, a veteran of the ruling Congress party who had dismissed his challenge as “not even on our radar”. Congress suffered a catastrophic defeat, being reduced to eight seats.

Almost all the candidates of the AAP were political debutants and included a rickshaw driver, a lawyer and a TV actor. Their key pledge was to clean up politics and the endemic corruption that has crippled the provision of public service for the many millions who cannot afford to pay for private healthcare, schooling or even basics such as water.

The party’s message and symbol – a broom – proved popular with urban voters also struggling with runaway inflation, chronic youth underemployment and slowing economic growth. Kerjiwal, who called the party’s victory a historic win, had initially said it would not form a minority government. But after lengthy negotiations in recent days, Congress has now decided to support the AAP in the Delhi local assembly.

2 End of China’s one-child policy (Straits Times) Changes to China’s strict one-child policy, which will allow more parents to have a second child, will begin to roll out early next year, the country’s family planning commission told official media. The policy change is expected to go into force in some areas of China in the first quarter of 2014, Yang Wenzhuang, a director at the National Health and Family Planning Commission told China’s official Xinhua news agency.

Beijing said last month it would allow millions of families to have two children, the most radical relaxation of its strict one-child policy in close to three decades. The move is part of a plan to raise fertility rates and ease the financial burden of China’s rapidly ageing population. Authorities are in the process of calculating the number of eligible couples and their situations before specific regulations are approved, Yang said.

3 AK-47 founder Kalashnikov no more (Sydney Morning Herald) Mikhail Kalashnikov, inventor of the world’s most popular assault rifle, the AK-47, a simple and durable weapon of war used by tens of millions in about 100 countries, has died. He was 94. He lived in Izhevsk in the Ural Mountains, the town that produces his rifles.

The Automatic Kalashnikov – Avtomat Kalashnikova, or AK-47, for the year its design was finalised – became prized by governments and rebels alike for its low cost, ease of use, light weight and resistance to corrosion and jamming. The Soviet Army made the weapon standard issue in 1949, as did most Warsaw Pact countries and dozens of liberation armies in Africa, Asia and Latin America during the Cold War.

The AK-47 was used in at least 40 of 60 large armed conflicts since 1945, Alexander Uzhanov, an associate fellow at the Academy of Military Science in Moscow, wrote in a 2009 biography of Kalashnikov. More than 100 million AK-47s have been sold worldwide, half of them counterfeit, according to Rosoboronexport, Russia’s state arms exporter.

Al-Qaeda leader Osama bin Laden posed next to the rifle in videos he released to the public before he was killed in 2011. Mozambique, an African nation that endured a long civil war after gaining independence from Portugal in 1975, includes an image of the AK-47 on its flag.

Kalashnikov said he came up with the AK-47′s design while recuperating from wounds suffered when invading Germans shelled the tank he was driving during the Battle of Bryansk in 1941. He long insisted that his goal had been to design a rifle to help the Soviet Union fend off a German invasion – not to arm extremists or criminals.