Sunday, June 30, 2013

Egypt erupts again; How the US is bugging European allies; China bank tops global rankings; Education in a global world; Hong Kong to be new protest zone

1 Egypt erupts again (Hamza Hendawi, Sarah El Deeb & Maggie Michael in San Francisco Chronicle) Hundreds of thousands thronged the streets of Cairo and cities around the country Sunday and marched on the presidential palace, filling a broad avenue for blocks, in an attempt to force out the Islamist president with the most massive protests Egypt has seen in 2½ years of turmoil.

In a sign of the explosive volatility of the country's divisions, a hard core of young opponents broke away from the rallies and attacked the main headquarters of President Mohammed Morsi’s Muslim Brotherhood. Fears were widespread that the two sides could be heading to a violent collision in coming days. Morsi made clear through a spokesman that he would not step down and his Islamist supporters vowed not to allow protesters to remove one of their own, brought to office in a legitimate vote.

The protesters aimed to show by sheer numbers that the country has irrevocably turned against Morsi, a year to the day after he was inaugurated as Egypt's first freely elected president. "Mubarak took only 18 days although he had behind him the security, intelligence and a large sector of Egyptians," said Amr Tawfeeq, an oil company employee marching toward Ittihadiya with a Christian friend. Morsi "won't take long. We want him out and we are ready to pay the price." Protesters believe the military would throw its weight behind them, tipping the balance against Morsi. The country's police, meanwhile, were hardly to be seen Sunday.

2 How US is bugging European allies (Ewen MacAskill &Julian Borger in The Guardian) US intelligence services are spying on the European Union mission in New York and its embassy in Washington, according to the latest top secret US National Security Agency documents leaked by the whistleblower Edward Snowden. One document lists 38 embassies and missions, describing them as "targets". It details an extraordinary range of spying methods used against each target, from bugs implanted in electronic communications gear to taps into cables to the collection of transmissions with specialised antennae.

Along with traditional ideological adversaries and sensitive Middle Eastern countries, the list of targets includes the EU missions and the French, Italian and Greek embassies, as well as a number of other American allies, including Japan, Mexico, South Korea, India and Turkey. The list in the September 2010 document does not mention the UK, Germany or other western European states.

The documents suggest the aim of the bugging exercise against the EU embassy in central Washington is to gather inside knowledge of policy disagreements on global issues and other rifts between member states. Germany's justice minister, Sabine Leutheusser-Schnarrenberger, demanded an explanation from Washington, saying that if confirmed, US behaviour "was reminiscent of the actions of enemies during the cold war".

3 Chinese bank tops global ranking (BBC) A Chinese bank has topped a list of the world's top 1,000 banks for the first time, according to a survey. ICBC moved up from third, switching places with last year's winner, Bank of America. JP Morgan remained second. The closely watched annual report by The Banker is based on a firm's Tier 1 capital, a key measurement of a bank's strength.

The UK bank sector as a whole ranked 10th, behind France, Brazil and Russia, and down from second in 2008. The Industrial and Commercial Bank of China (ICBC) moved into pole position on the back of a 15% increase in capital to $160.6bn. China Construction Bank, the country's second largest, also grew its capital by 15%, to $137.6bn, and dislodged Citigroup from fifth place. 

The UK's only bank in the top 10 is fourth-placed HSBC, with capital of $151bn, which gains significant earnings from its Asian operations.  China now has 96 banks in the top 1000 ranking and holds four places in the top 10. Its big four banks ICBC, CCB, Bank of China and Agricultural Bank of China also head the table for the largest profits. All but one of the 25 global banks with the greatest losses are European banks, and six of the top 10 losses were from Spanish banks. However, the report showed that total profits of the top 1,000 banks are now back to their pre-crisis levels.

4 Education in a global world (Dominic Sachsenmaier in Khaleej Times) Nations and education must stress cultural interactions. During the past few decades, the global economy and global culture have changed much faster than our mental maps. It’s troubling that entire education systems have not yet caught up with the new global realities. For instance, in Europe entire cohorts of students are still graduating from high schools and universities without having acquired even basic knowledge of outside world regions. 

In terms of their monocultural horizons, many European students more closely resemble their predecessors from a century ago than their present-day peers in numerous states outside of the West. In China, for example, educated elites for generations have been forced to systematically travel beyond their own cultural horizons. In most of Europe Asian literature and art remain a niche for aficionados and there is little broad societal interest in the non-Western world.

The source of this interest, education and knowledge gap between Europe and China is largely a carryover from the 19th and 20th centuries, a time of European and American dominance. During that period European elites regarded their own cultural habitat as a global center and the engine of the world’s development. For, many leaders and educators it seemed pointless to make serious efforts at understanding Chinese, Indian and Arabic societies.

The challenge for Europe becomes more pressing because the US is not in a similar position. To be sure, large parts of US society are not characterised by their deep interest in other parts of the world. Yet at the same time, the country has a large pool of well-qualified, college-educated first-, second- and third-generation immigrants from Asia and elsewhere who can indeed serve as much needed bridge-builders in a global age. Moreover, for a number of global and local reasons, leading US universities have systematically strengthened their expertise on Asia and other world regions, and have done so for decades. Widespread cultural ignorance no longer fits into a shifting world in which Chinese and other non-Western countries are themselves going global.

5 Hong Kong to be next protest zone (Straits Times) Huge crowds will march through Hong Kong on Monday to protest against the city's pro-Beijing leader and the pace of political reforms, as the former British colony marks the 16th anniversary of its handover to China. Organisers said they expect to see more than 400,000 people take part in the annual rally for democracy, which comes amid concerns in the southern Chinese city that Beijing is increasingly meddling in local affairs.

The demand for universal suffrage, a widening income gap and soaring property prices are expected to drive the march as protesters focus their anger on unpopular Chief Executive Leung Chun-ying. "The main goal of the rally is to push through for genuine democracy and to ask for Leung Chun-ying to step down," Jackie Hung of the Civil Human Rights Front, which is organising the march, said.

Friday, June 28, 2013

Restless Latin America; India's pilgrim tourism and disasters; When UK mulls power rationing; 'Be somebody' making global footprint

1 Restless Latin America (Khaleej Times) While the protests in Brazil, despite President Dilma Vana Rousseff’s conciliatory tone and actions, appear to show no signs of dissipating, there’s another Latin American nation that’s venting its anger on the streets. Chile has been hit by a powerful student movement. The students of public educational institutions, who started their demonstrations in 2011 to demand free and better education, have recently become more forceful in their demands.

The students have occupied school and university campuses. Their main contention is the lack of equal educational opportunities in Chile; according to them, students from middle-class backgrounds have better access to education than their counterparts in under-funded public institutions. But the Chilean authorities have stepped up action against the renegade youth before the forthcoming presidential elections. 

Judging from these developments in Brazil and Chile, it seems like these Latin American countries are going through the kind of turmoil that led to democratisation in the continent two decades ago. During the 1980s, most Latin American countries under military rule faced widespread protests that ultimately brought in representative governments. Even Augusto Pinochet’s ultra-repressive regime in Chile could not contain the widespread protests in 1989-1990.

So given that the continent has a strong history of popular dissent, leaders will have to pay heed to the people’s demands if peace and order has to be restored.

2 India’s pilgrim tourism and disasters (Tripti Lahiri & Preetika Rana in The Wall Street Journal) Tourism anywhere creates pressure on local services and conflict with residents – but that is particularly true of India’s Himalayan destinations whose shrines were once reached only by hardy devotees on ascetic spiritual journeys. Now palanquins and helicopters aren’t uncommon.

These numbers, and the increased comfort required by contemporary pilgrims, have increased the pressure on both federal and state authorities to ensure safety. In addition to health concerns, the pilgrimage takes place in a state where a separatist insurgency has been underway for two decades, requiring more security than other religious destinations.

A 2012 report on religious tourism by the Federation of Indian Chambers of Commerce and Industry looked prescient in light of this month’s floods, warning that the popular Char Dham pilgrimage was at risk of high weather-related casualties. The Char Dham Yatra is organized largely through private arrangements, and this has spurred a boom in hotel, road and other construction to cater to these visitors. The surge in building has left Uttarakhand overwhelmed, federal officials say.

On its website, the Uttarakhand state government acknowledged urban development had “occurred in a unplanned manner” to benefit from rising religious tourism. One reason the historic Kedarnath shrine survived the recent floods, was due to superior construction techniques that authorities need to insist upon, Bangalore-based civil engineering professor TG Sitharam said. It is built solidly upon an elevated platform, he said, which provided it protection from flood waters. The same can’t be said of newer structures.

Ignoring the special requirements of mountain towns that are located near rivers, and prone to heavy monsoon rains, may have helped spur economic growth in some states in recent years. But it will turn out to have a high cost in the long run, experts say. This year’s floods are just one example of that. “Over the last decade, locals have set up private lodges, guest houses and hotels to cash in on tourism along religious sites,” said Mr. Sitharam. “It’s good business, no doubt, but it comes at a heavy price: safety.”

3 When UK mulls power rationing (Marina Hyde in The Guardian) For a post-imperial power still somehow declining to accept its place in the world, electricity rationing would surely provide the most sobering of perspectives. After all, if domestic power consumers are paying vast bills to subsidise whatever remains of our manufacturing industry to lie silent just so they can have a cup of tea and watch The One Show when they get in from work, I don't imagine even the maddest of hawks would be fussing about whether we had aircraft carriers or not.

No one could possibly even mention the idea of our seat on the UN security council without dissolving into gallows cackles about the lunacy of it all. And if there were any people genuinely able to insist on our need for nuclear submarines when business is shutting at 4pm, as Tesco holds candlelit trolley dashes, then I would suggest their skills for the new world lie as fabulists and the most unwitting of comedians.

4 ‘Be somebody’ making global footprint (Sarah Young in Khaleej Times) Inspirational graffiti is now gracing the walls of Dubai, thanks to an American team undertaking a whirlwind, paint-splashing tour through 15 cities in 11 countries. A team of four has brought the slogan from the social media motivation movement “Be Somebody” to walls in Dubai.

The brainchild of Kash Shaikh, who worked for nine years building brands for Proctor and Gamble and camera company GoPro, and Josh Heuser, founder of Agar, a culture-creating marketing and social intelligence agency in the US, the six-week self-funded tour started on May 25 in Austin, Texas, and will finish in San Francisco on July 4. was started by Shaikh who began using the hashtag #besomebody in 2009. The blog now claims to be the fastest-growing online motivation movement in the world, with content reaching 3 million people each week in 30 countries. The idea came about after Shaikh saw the phrase tagged on an overpass in his home town Houston, Texas. “Any time someone saw that they’d take a picture and send it to me. I had hundreds in my inbox.”

Thursday, June 27, 2013

Ireland back in recession; The real crisis in Australia; PayPal eyes payments in space; Too much going wrong for South Africa; Global retailers wary of India

1 Ireland back in recession (Henry McDonald in The Guardian) Ireland is back in recession for the first time since its 2010 bailout, official figures have confirmed. Irish GDP shrank 0.6% in the first quarter of 2013, but the recession was confirmed when official data revised down the economy's performance in the final three months of 2012 to a decline of 0.2%. It means that Ireland has endured three successive quarters of contraction, despite the presence in Ireland of multinationals such as Apple, Google, IBM and several big pharmaceutical companies.

The blow comes as Ireland reels from the unfolding Anglo Irish Bank scandal, in which executives at the bailed-out bank were caught on tape joking about their multi-billion euro rescue in 2008 and, at one point, singing "Deutschland ├╝ber Alles" as they quipped about German deposits shoring up the bank.

The output drop reflects an ongoing depression in consumer demand, amid unemployment of nearly 14%. Personal expenditure declined by 3% between the fourth quarter of 2012 and the first quarter of 2013. The decrease in demand reflects Irish consumers' fears for their jobs and a reluctance to get into debt following the credit-fuelled spending boom of the Celtic Tiger years. Exports fell by 3.2% in the first quarter, in a stark reversal for an economy that had enjoyed an export-led recovery.

2 The real crisis in Australia (William Pesek in The Sydney Morning Herald) No country is more vulnerable to the much-dreaded slowdown in China than resource-rich Australia. The mining boom that fuelled nearly all of its recent growth is nearing a cliff of economic risk. “Australia is a leveraged time bomb waiting to blow,” says Albert Edwards, Societe Generale's London-based global strategist. “It is not just a CDO, but a CDO squared. All we have in Australia is, at its simplest, a credit bubble built upon a commodity boom dependent for its sustenance on an even greater credit bubble in China.”

There's a bit of hyperbole in this view. But highly-advanced Australia is about to pay the price for growing so addicted to a developing nation. Exporting natural resources led to the neglect and atrophying of other critical sectors. It's created a two-speed economy: The commodities-rich western states and Queensland raced ahead on China's once insatiable demand for metals, while the rest of the country lagged behind. Now, the price for Western Australia's iron ore has fallen to $115 per tonne - a far cry from the $180 paid by Chinese steel mills when the Australian dollar was touching highs of $US1.10.

The shockwaves caused by even modest attempts by China's central bank to clamp down on credit show how profoundly this downshift will affect the globe. It will result in slower growth from Japan to Brazil and slam industries like autos, chemicals, heavy manufacturing, energy and steel. If China needs to dump some of its $1.3 trillion of US Treasuries to bail out state-owned banks, markets everywhere will quake.

Australia is a microcosm of what awaits the world. How officials respond will offer clues to policy makers everywhere. Australia should indeed sell all the underground treasures it can to fast-growing developing nations. But in the long run, it's more important for the country to cultivate what's above ground. Australia's future lies in ideas, innovation and the ingenuity of its 23 million people - not in a China that's ripe for a crash.

3 PayPal eyes payments in space (Benny Evangelista in San Francisco Chronicle) Silicon Valley tech firms are always launching a product, service or feature. But PayPal is actually launching an initiative it hopes will carry the online payments firm into space.

PayPal, the SETI Institute and the Space Tourism Society are announcing PayPal Galactic, which is a drive to pull together the best minds of science and commerce to start discussing how future space travelers will pay for goods and services in the final frontier. In addition, PayPal is powering a crowdfunding drive for the SETI Institute.

4 Too much going wrong for South Africa (Justice Malala in Johannesburg Times) When one hears that a military ambulance carrying the revered former president of our democracy broke down by the side of the road, leading to a 40-minute wait for a replacement, the heart lurches. It does not lurch because this is a terrible thing in itself. Mishaps happen. It lurches because the nation is uneasy. It lurches because there is just too much that seems to be going wrong that should not go wrong.

The nation is uneasy. Times are getting harder. Unemployment is on the rise. Every day a community is up in arms over service delivery. Policemen are "executed". Workers are mowed down by the police. The rand continues to weaken. And South Africans are drowning in debt.

The ANC has a Jacob Zuma problem, a problem now succinctly enunciated by the likes of Kenny Kunene in his open letter last week. Nothing illustrates the enormity of the ANC's problem, and therefore our problem, like Zuma's defence last week in parliament of his friendship with the accused Gupta family of Waterkloof Air Force Base fame.

The nation is uneasy. And it is restless. And it sees that the world is restless too. The Turks are throwing stones in the streets and are calling for their leaders to step down. The Brazilians are tired of an inequality that mirrors our own here in South Africa. In those countries too, the people became uneasy. Then they acted.

5 Global retailers wary of India (Rajesh Roy in The Wall Street Journal) Global retailers hoping to invest in India's recently opened retail sector are holding back as political support for foreign tie-ups appears to be crumbling.

"Some prospective investors have generally conveyed that they will have to address apprehensions of their boards" while planning their investments, according to a document prepared by India's Department of Industrial Policy and Promotion during Trade Minister Anand Sharma's visit to London recently.

In September, India for the first time opened up the multibrand retail sector to foreign companies, permitting them to own up to 51% in local ventures.

Wednesday, June 26, 2013

UK slashes public sector jobs; US growth revised down to 1.8%; Brazil, Turkey and the 'goal' of concessions; Paying the price for dropping out of college

1 UK slashes public sector jobs (Patrick Wintour & Heather Stewart in The Guardian) George Osborne conjured up a populist crackdown on welfare and public sector pay as he sought to minimise the impact of a further £11.5bn of spending cuts, including £2.6bn taken from council budgets and £500m axed from education.

Unveiling the results of his spending review 2015-16, the chancellor claimed that it would be possible to achieve £5bn of the sought-after savings through efficiencies, although this will include the loss of a further 144,000 public sector jobs. Police, student grants and charities will also be hit.

Claiming the economy was moving from rescue to recovery, Osborne set out a fifth and unscheduled year of austerity. "We have to deal with the world as it, not as we wish it to be, so this country has to continue to make savings," he said. "If we abandoned our deficit plan, Britain would be back in intensive care."

In a bid to grab headlines and push Labour into a corner ahead of the 2015 election, Osborne announced an unexpected package of welfare reforms and confirmed he was ending automatic pay rises for employees in the public sector.

2 US growth revised down to 1.8% (BBC) The US economy grew by less than previously estimated in the first quarter of the year, the Commerce Department has said. Gross domestic product - which measures annual economic output - grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise. Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision.

In the final quarter of 2012, the annualised growth rate had been 0.4%. Global stock markets had dropped sharply at the end of last week after Fed chairman Ben Bernanke said that the US central bank could start reining in its quantitative easing programme later this year and wind it up completely by mid-2014.

A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%. An increase in the Social Security taxes has reduced income for most Americans. A person earning $50,000 to $75,000 a year has about $1,000 less to spend, while a household with two high earners will have roughly $4,500 less.

Earlier this month the International Monetary Fund urged the US government to repeal the huge federal budget cuts introduced this year, denouncing them as "excessively rapid and ill-designed", and warning they would be a significant drag on growth this year.

3 Brazil, Turkey and the ‘goal’ of concessions (Mahir Ali in Khaleej Times) Will the protests in Brazil die down before the World Cup? It is perhaps no more than an intriguing coincidence that at least some of the teargas used against protesters in Turkey bore a “Made in Brazil” stamp. What is arguably less coincidental is the similarity between the Brazilian mass mobilizations of the past two weeks and the recent Turkish variant.

It’s a resemblance that Recep Tayyip Erdogan has recognised, telling reporters last week: “The same plot is being laid in Brazil. The symbols, the banners, Twitter and the international media are the same.” It is true enough that in both cases the initial spark was a relatively minor concern: the redevelopment of Istanbul’s Gezi Park in one instance, a marginal hike in bus fares in the other. There is a remarkable difference, though, between the reactions of the two governments.

Erdogan was quick to demonise the demonstrators. Brazil’s President Dilma Rousseff struck a very different note. “Brazil woke up stronger today,” she declared in the immediate aftermath of mass mobilizations early last week. “The size of yesterday’s demonstrations shows the energy of our democracy, the strength of the voice of the streets and the civility of our population.”

The increase in bus fares was also speedily rescinded. But by then it was already too late. Brazil’s achievements are not to be scoffed at, notably in the sphere of reducing absolute poverty — which helps to explain why Luz Inacio da Silva, better known as Lula, enjoyed a popularity rating of over 80% when his second term ended following the 2010 election, despite accusations of corruption against some of his closest aides.

His successor, Rousseff — the daughter of a Bulgarian communist — has not deviated too sharply from the policies of her predecessor, but has in the past few days been persuaded to propose significant reforms, including constitutional reforms. It would no doubt help, were Erdogan inclined to import Dilma’s attitude rather than her country’s teargas.

4 Paying the price for dropping out of college (Eduardo Porter in The New York Times) College graduation rates in the US are continuing to slip behind, according to a report by the Organization for Economic Cooperation and Development, failing to keep pace with other advanced nations.

In 2000, 38% of Americans age 25 to 34 had a degree from a community college or a four-year institution, putting the nation in fourth place among its peers in the OECD. By 2011, the graduation rate had inched up to 43%, but the nation’s ranking had slipped to 11th place. Graduation rates in the US among 55- to 64-year-olds are higher than in any industrial country except Canada and Israel — reflecting the nation’s head start. 

What’s most troubling, perhaps, is that Americans are actually enrolling in college and then dropping out halfway through — when they’ve probably already incurred a bunch of debt and won’t benefit from the better job prospects that come with a degree. More than 70% of Americans matriculate at a four-year college. But less than two-thirds end up graduating. Including community colleges, the graduation rate drops to 53%. Only Hungary does worse.

And the most perplexing part of this accounting is that regardless of cost, getting a degree is the best financial decision a young American can make. College graduates have higher employment rates and make more money. According to the OECD, a typical graduate from a four-year college earns 84% more than a high school graduate. A graduate from a community college makes 16% more.