Wednesday, August 14, 2013

Blood and fire in Cairo; Cisco profit up, lays off 4,000 staff; No quick fixes for India rupee; Sixty six years of India, Pak freedom

1 Blood and fire in Cairo (Khaleej Times) The climax scene on the Tahrir Square was appalling. As the security forces moved in to clear the camps set up by the Muslim Brotherhood since July 3, it was blood and fire everywhere. A large number of charred bodies were also recovered from the square, which hinted that activists might have been burnt to death, as they slept in their tents when the action begun. Though there are conflicting reports, it is believed that more than 125 people lost their lives as army tanks and police vehicles made their way across the landmark site that has seen excessive sit-ins for the last one year.

The Brotherhood had put the casualties at around 250, but there is no confirmation on that count. The crackdown was imminent, as the authorities had time and again warned that these protest campaigns had brought national life to a standstill. The country is deep in the midst of parochial sentiments. The situation as of now is that while a large number of people have been dispersed from the square, the agitation campaign still hasn’t come to an end. Supporters of ousted president Mohammed Mursi are defiant and, if reports are to be believed, they plan to return to the landmark site once again.

The bottom line is that Egypt has become accustomed to unrest and instability since the Arab Spring blew across it, and the fundamental objectives of the uprising seem to have been lost. The point is this is not the time to score points either from the government or the opposition. What needs to be done is to pull the country out from the quagmire of dissent. A national approach to address political differences cannot be delayed any further. The Brotherhood will do well by opting for talks rather than sitting idle at the Tahrir.

2 Cisco profit up, lays off 4,000 (Barbara Ortutay in San Francisco Chronicle) Cisco's earnings and revenue grew in the latest quarter as demand for its computer networking equipment increased. But CEO John Chambers called the global economy "challenging and inconsistent" and the company said it is cutting about 4,000 jobs, or about 5 percent of its work force.

Cisco's revenue guidance for the current quarter was weaker than Wall Street expected, and shares fell sharply in extended trading. Revenue rose 6 percent to $12.42 billion from $11.69 billion. Cisco's performance is widely regarded as a bellwether for the technology industry. That's because the San Jose, California, company cuts a broad swath, selling routers, switches, software and services to corporate customers and government agencies. Cisco's fiscal quarters end a month later than most other major technology companies, giving it additional time to assess economic conditions.

Chambers said that economic conditions in Europe still "vary significantly" by region, with the north and the UK showing "very positive progress." "We remain cautious, however, given the instability of the southern region," he added. Over the long term, Chambers said that the company still expects revenue to grow 5 percent to 7 percent, and added that Cisco is in a "better position in the market today than ever before."

3 Quick fixes aren’t helping India rupee (Sudeep Jain & Shefali Anand in The Wall Street Journal) India this week announced several steps aimed at shrinking its large current-account gap and stabilizing the rupee, but economists and markets have reacted with a shrug. The rupee has continued to slide. On Wednesday, it was trading at 61.57 rupees for one US dollar, versus 60.80 for a dollar, before India outlined its plans late Monday.

The measures, outlined by Finance Minister Palaniappan Chidambaram, are meant to reduce India’s import bill by buying more oil from Iran in rupees rather than from the international market in dollars. On Tuesday, India raised taxes on gold and silver to make these more expensive in the domestic market, in an attempt to reduce imports. Mr. Chidambaram expects these steps to help cut the country’s current-account gap from a record $87.8 billion or 4.8% of gross domestic product, for the year that ended March 31 to $70 billion, or 3.7% of GDP, for the current fiscal year.

Many are worried India’s slowing economy means regular inflows into Indian stock and bond markets and foreign direct investments will be slower than in past years. The economy is set to grow at 5% in 2013, much lower than rates of around 9% a few years ago. Foreign institutional investors, for instance, have pulled out more than $10 billion from Indian stocks and bonds since June.

Observers say India needs to attract long-term capital by economic overhauls that would open up more domestic sectors to foreign investors and making it easier to conduct business. Other moves to boost investor confidence have stalled, hurting sentiment. India, for instance, has cleared several infrastructure projects in the last two months, but these projects haven’t yet begun.

4 Sixty six years of India, Pak freedom (Rahul Singh in Khaleej Times) Independent India will be 66 years old today, as will Pakistan. Both countries got their Independence from British rule on August 15, 1947. Mohammed Ali Jinnah was Pakistan’s first Governor-General and the main driving force for the formation of that country. Jawaharlal Nehru was India’s first Prime Minister but Mahatma Gandhi is considered the father of the nation. Both Jinnah and Gandhi died soon after their countries’ independence, but Nehru remained to guide India.

In Pakistan, an elected government has recently given way to another democratically-elected, an unprecedented devolution for Pakistan, bedeviled as it has been with coups and long bouts of military rule. Indeed, a disastrous army dictatorship, that of the bumbling General Yahya Khan, led to a humiliating defeat at the hands of India, the break-up of Pakistan and the creation of Bangladesh. Fortunately, India has not broken up. Pakistan imagined that religion was the glue that would bind it together. It was wrong. India’s democracy proved to be a much stronger binding force than religion.

Is India’s glass half full, or half empty? The empty part relates to insufficient progress in two main areas: Education and health. India’s literacy rate is still only a little over 70 per cent, which means that over 300 million Indians, mostly girls, cannot read or write. And the expectancy of life – the surest indicator of health – is still less than 70 years. Countries like China, Indonesia and even Sri Lanka, which were behind India in these social parameters six decades ago, have done better than India.

Where the glass is half full is in the rapid economic growth India has made in the past two decades, next only to China’s, creating a middle class of around 300 million Indians. India has become a giant in the information and technology (IT) areas and a major base for outsourcing jobs and skills for major western multinational companies. Indian companies like the Tatas and Birlas have also successfully ventured abroad.

A quarter century ago, India did not figure among the nations that mattered in the world. It now matters and Indians can justifiably be proud of that. The same, sadly, cannot be said for Pakistan. On August 15, 1947, Jawaharlal Nehru made perhaps his most eloquent speech. He spoke about his nation stepping out “from the old to the new” and of India’s “tryst with destiny”. That tryst still needs to be fulfilled.

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