How India, Indonesia are coping with economic stress; Struggling BlackBerry sold for $4.7bn; India's hidden massacre; Speedy trains propel China

1 How India, Indonesia are coping with economic stress (Keith Bradsher, Joe Cochrane & Neha Thirani Bagri in The New York Times) India, with a population of about 1.2 billion, and Indonesia, population 250 million, are both struggling to modernize their infrastructure while stuck with complex land ownership laws that make it hard to redevelop cities rapidly. Both are wrestling with costly but politically popular fuel subsidies that are driving up government budget deficits, and both have indignant publics demanding an end to endemic corruption.

Perhaps most important, both face national elections next year that limit their ability to make politically unappetizing economic decisions. The different policies outlined on Friday in Jakarta and Mumbai reflect differences in the seriousness of their predicaments, however, with India appearing to be in considerably worse shape. 

While Indonesia’s ports and highways still have shortcomings, as does the country’s bureaucracy, they are good enough that the country has emerged as one destination for the many companies shifting operations away from China in response to surging blue-collar wages there. India’s bureaucracy remains stifling, and the potholes and traffic on the country’s roads are so bad that vehicles scarcely move faster than walking speed in some areas. 

The vice president of Indonesia characterized higher interest rates and a weakened currency as the “new normal.” But in Mumbai, the new governor of the Reserve Bank of India suggested that India faced less of an international threat after the Federal Reserve decided to continue its economic stimulus, at least temporarily.
http://www.nytimes.com/2013/09/21/business/global/indonesia-needs-to-wean-itself-from-easy-money-leader-says.html?pagewanted=2&_r=0&src=rechp

2 Struggling BlackBerry sold for $4.7bn (Rob Gillies in San Francisco Chronicle) BlackBerry's largest shareholder has reached a tentative agreement to pay $4.7 billion for the troubled smartphone maker, even as many investors fret about its potential demise. BlackBerry said Fairfax Financial Holdings has signed a letter of intent that "contemplates" buying the company for $9 per share in cash in a deal that would take the company private.

The tentative deal comes just days after the Canadian company announced plans to lay off 40 percent of its global workforce. The offer price is below what BlackBerry was trading at before the layoff announcement. Analysts say that although BlackBerry's hardware business is not worth anything, the company still owns valuable patents. BlackBerry is also strong in having total cash and investments of about $2.6 billion, with no debt, though it's burning through that stockpile. In just the past few months, it's spent about half a billion dollars.

The BlackBerry, pioneered in 1999, was once the dominant smartphone for on-the-go business people and other consumers. It could be so addictive that it was nicknamed "the CrackBerry." Although BlackBerry was once Canada's most valuable company with a market value of $83 billion in June 2008, the stock has plummeted to less than $9 from over $140 a share, giving it a market value of $4.6 billion, just short of Fairfax's offer.

http://www.sfgate.com/business/technology/article/Fairfax-reaches-tentative-deal-to-buy-BlackBerry-4836319.php

3 India’s hidden massacre of 1948 (Mike Thomson on BBC) When India was partitioned in 1947 about 500,000 people died in communal rioting, mainly along the borders with Pakistan. But a year later another massacre occurred in central India, which until now has remained clouded in secrecy. In September and October 1948, soon after independence from the British Empire, tens of thousands of people were brutally slaughtered in central India. 

The massacres took place a year after the violence of partition in what was then Hyderabad state, in the heart of India. It was one of 500 princely states that had enjoyed autonomy under British colonial rule. When independence came in 1947 nearly all of these states agreed to become part of India. But Hyderabad's Muslim Nizam, or prince, insisted on remaining independent. This outraged the new country's mainly Hindu leaders in New Delhi.

In September 1948 the Indian Army invaded Hyderabad. In what was rather misleadingly known as a "police action" the Nizam's forces were defeated after just a few days without any significant loss of civilian lives. But word then reached Delhi that arson, looting, and the mass murder and rape of Muslims had followed the invasion. Determined to get to the bottom of what was happening, an alarmed Nehru commissioned a small mixed-faith team to go to Hyderabad to investigate. It was led by a Hindu congressman, Pandit Sunderlal. But the resulting report that bore his name was never published

The Sunderlal report estimated that between 27,000 to 40,000 people lost their lives. The Sunderlal report remains elusive, although, unknown to many, it is now open for viewing at the Nehru Memorial Museum and Library in New Delhi. There has been a call recently in the Indian press for it to be made more widely available, so the entire nation can learn what happened. It could be argued this might risk igniting ongoing tensions between Muslims and Hindus.

4 Speedy trains propel China economy (Keith Bradsher & Hilda Wang in The New York Times) Just five years after China’s high-speed rail system opened, it is carrying nearly twice as many passengers each month as the country’s domestic airline industry. With traffic growing 28 percent a year for the last several years, China’s high-speed rail network will handle more passengers by early next year than the 54 million people a month who board domestic flights in the US.

China’s high-speed rail system has emerged as an unexpected success story. Economists and transportation experts cite it as one reason for China’s continued economic growth when other emerging economies are faltering. But it has not been without costs — high debt, many people relocated and a deadly accident. The high-speed rail lines have, without a doubt, transformed China, often in unexpected ways. 

China’s high-speed rail program has been married to the world’s most ambitious subway construction program, as more than half the world’s large tunneling machines chisel away underneath big Chinese cities. That has meant easy access to high-speed rail stations for huge numbers of people.

New subway lines, rail lines and urban districts are part of China’s heavy dependence on investment-led growth. Despite repeated calls by Chinese leaders for a shift to more consumer-led growth, it shows little sign of changing. The Chinese government is already struggling with nearly $500 billion in overall rail debt. Most of it was incurred for the high-speed rail system and financed with bank loans that must be rolled over as often as once a year. 

Another impact: air travel. Train ridership has soared partly because China has set fares on high-speed rail lines at a little less than half of comparable airfares and then refrained from raising them. On routes that are four or five years old, prices have stayed the same as blue-collar wages have more than doubled. That has resulted in many workers, as well as business executives, switching to high-speed trains. Airlines have largely halted service on routes of less than 300 miles when high-speed rail links open. They have reduced service on routes of 300 to 470 miles.

http://www.nytimes.com/2013/09/24/business/global/high-speed-train-system-is-huge-success-for-china.html?pagewanted=1&ref=business