Friday, February 28, 2014

US economy stays fragile; Cry for me, my name is Argentina; Lego turns world's top toy maker; India's Sahara Group boss surrenders to cops

1 US economy stays fragile (Khaleej Times) Orders for long-lasting US manufactured goods excluding transportation unexpectedly rose last month as did a gauge of business spending plans, but that will probably not change views that factory activity is slowing. Other data showed an unexpected increase in the number of Americans filing new applications for unemployment benefits last week. The run-up in claims, however, likely does not signal a fundamental shift in labor market conditions.

The Commerce Department said durable goods orders excluding transportation rose 1.1 per cent, the largest increase since May, after falling 1.9 per cent in December. Data such as industrial production and regional factory surveys have suggested that manufacturing hit a soft patch in recent months. A plunge in aircraft orders at Boeing and a drop in motor vehicles orders saw orders for transportation equipment falling 5.6 per cent in January.

In a separate report, the Labour Department said initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 348,000. Economists polled by Reuters had forecast first-time applications for jobless benefits slipping to 335,000 in the week ended February 22, which included the Presidents Day holiday.
2 Cry for me, my name is Argentina (Roger Cohen in The New York Times) A century ago, Argentina was richer than Sweden, France, Austria and Italy. It was far richer than Japan. It held poor Brazil in contempt. Vast and empty, with the world’s richest top soil in the Pampas, it seemed to the European immigrants who flooded here to have all the potential of the US (per capita income is now a third or less of the US level). They did not know that a colonel called Juan Domingo PerĂ³n and his wife Eva (“Evita”) would shape an ethos of singular delusional power.
“Argentina is a unique case of a country that has completed the transition to underdevelopment,” said Javier Corrales, a political scientist at Amherst College. In psychological terms Argentina is the child among nations that never grew up. Responsibility was not its thing. Why should it be? There was so much to be plundered, such riches in grain and livestock, that solid institutions and the rule of law seemed a waste of time.
The Argentina I covered in the 1980s was just emerging from the trauma of military rule. If I have a single emblematic image of the continent then it is of the uncontrollable sobbing of Argentine women clutching the photographs of beloved children who had been taken from them for “brief questioning” only to vanish. The region’s military juntas turned “disappear” into a transitive verb. It is what they did to deemed enemies — 30,000 of them in Argentina.
Cry for me, my name is Argentina and I am too rich for my own good. Twenty-five years ago I left a country of hyperinflation (5,000 percent in 1989), capital flight, currency instability, heavy-handed state interventionism, dwindling reserves, uncompetitive industry, heavy reliance on commodity exports, reawakening Peronist fantasies and bottom-of-the-world complexes.
Coming ashore at Ushuaia on Argentina’s southern tip, the first thing I saw was a sign saying that the “Malvinas” islands were under illegal occupation by the United Kingdom since 1833. The second was a signpost saying Ireland was 13,199 kilometers away (no mention of Britain). The third was a packet of cookies “made in Ushuaia, the end of the world.” The fourth was a pocket calculator used by a shopkeeper to figure out dollar-peso rates. Hope is hard to banish from the human heart, but it has to be said that Argentina does its best to do so.

3 Lego turns world’s top toy maker (Rupert Neate in The Guardian) It is a brand name familiar to children around the world, but a decade ago Lego was in crisis. Sales were collapsing at a rate of 26% a year, it lost 1.4bn Danish kroner (£150m) in 2003 and private equity firms were circling the 82-year-old family-owned Danish company.

Now, after a series of job cuts and the ending of the family's management of the company, the plastic brick business has rebuilt itself into the world's most profitable toy maker ahead of Barbie's Mattel. The company, which has been headquartered in the small Danish town of Billund (population 6,155) since 1932, has reported "another record breaking year" of sales and profits growth – for the ninth consecutive year.
Its high profitability comes from its ability to turn each kilogram of raw material plastic – which costs less than $1 – into sets that sell for more than $75 per kg. Annual profits increased by almost 10% to 8.2bn kroner (£900m) – about the same as the profit Facebook turned in last year. Sales jumped 10% to 25.3bn kroner (£2.8bn).
Lego chief executive Joergen Vig Knudstorp said Lego's success was due to constant innovation and the creation of 60-70 new products every year, including Harry Potter, Star Wars and SpongeBob SquarePants ranges. But he admitted it is still a "major innovation challenge" to "stay on the top of children's wish lists" against competition from iPads and computer games. "We need to constantly become better, or otherwise there will be someone out there who will catch up to us," he said.

4 India’s Sahara Group boss surrenders to cops (The Wall Street Journal) Sahara Group Chairman Subrata Roy, one of India’s best-known business leaders, surrendered to the police on Friday, after a warrant was issued to force him to come to court and face charges the group had failed to pay billions of dollars owed investors.

The Supreme Court ruled Wednesday that the 65-year-old Mr. Roy be arrested and presented before the court on March 4. The court was not happy that Mr Roy had failed to show up in court that day for a hearing of the case in which the Sahara Group is accused of failing to comply with a 2012 court order to return money to its bond investors. Mr. Roy turned himself in on Friday after police failed to find him at his sprawling home in the northern city of Lucknow on Thursday.

Mr. Roy’s group is one of the few big businesses in Lucknow, and has interests in real estate and media and even owns a Formula One team. It is best known for sponsoring India’s national cricket team. Sahara Group employs 1.2 million workers and has tens of millions of investors, according to the company.

In 2012, the Supreme Court ruled that a sale of bonds by two Sahara companies violated India’s securities laws, and that the company repay around 174 billion rupees ($2.8 billion) to these investors via the Securities and Exchange Board of India.  While Sahara says it has already paid investors directly, SEBI does not agree.

Thursday, February 27, 2014

UK growth revised down to 1.8%; Tesla's 'Gigafactory' plan; When phone meets tablet, it's Phabulous; Qantas to cut 5,000 jobs

1 UK growth revised down to 1.8% (Angela Monaghan in The Guardian) Britain's economy grew at a slightly slower rate than previously thought in 2013, but economists welcomed signs that growth was more balanced in the final three months of the year. Gross domestic product increased by 1.8% last year compared with an earlier estimate of 1.9% after growth in both the first and second quarters was revised down by 0.1 percentage points by the Office for National Statistics. However it was still the strongest annual rate of growth since 2007, when the economy grew by 3.4% before the financial crisis.

On a quarterly basis, the ONS confirmed the economy grew by 0.7% in the fourth quarter, unchanged from its first estimate published last month. Details showed a lesser dependence on consumer spending than previous quarters, which, combined with a rise in exports and business investment, was good news for UK policymakers seeking a move away from a economy reliant on debt-fuelled household spending.

Howard Archer, chief economist at IHS Global Insight, said, "The critical question going forward is: can the economy build on the more broad-based growth seen in the fourth quarter of 2013?" Britain's trade position improved in the fourth quarter with the trade deficit narrowing to £6.6bn from £8.2bn in the third quarter after exports rose 0.4% but imports fell 0.9%. Over 2013 as a whole export growth of 0.8% outpaced a 0.4% growth in imports.

2 Tesla's 'Gigafactory' plan (David R Baker in San Francisco Chronicle) Electric car-maker Tesla Motors will spend $2 billion to build a massive factory capable of producing advanced batteries for 500,000 vehicles per year, the company has said. The “Gigafactory” will debut in roughly 3 years and employ 6,500 people. The facility is crucial to Tesla’s long-range goal of making affordable electric cars for the broader public. It could also help Tesla seize a sizable chunk of the growing market for batteries that can power entire buildings or backup the electrical grid.

“As we at Tesla reach for our goal of producing a mass market electric car in approximately three years, we have an opportunity to leverage our projected demand for lithium ion batteries to reduce their cost faster than previously thought possible,” the company said. When the Gigafactory reaches full production in 2020, the facility will build more lithium-ion batteries each year than all the world’s battery factories produced in 2013, the company said. And its economies of scale will drive down battery costs by 30 percent, according to Tesla’s estimates.

The company has built its reputation with pricey and luxurious plug-in vehicles, notably the Model S sedan, whose base price ranges from $71,070 to $94,570 depending on the size of the battery pack. But CEO Elon Musk has vowed to make a car affordable to the middle class by mid-decade. The Gigafactory would build batteries for that mass-market car, which the company refers to as the Gen III.
But the factory could also help Tesla branch out from the auto industry. The Palo Alto company already plans to supply battery packs for buildings through a partnership with one of Musk’s other companies, SolarCity.

3 When phone meets tablet, its Phabulous (Molly Wood in The New York Times) The tablet and the phone are fast becoming the same device, and I for one can’t wait. Bigger phones have been a big trend over the last couple of years, and despite a somewhat mocking moniker, the “phablet” (phone plus tablet) is here to stay. I predict that within a few years, seven- and eight-inch tablets, like the iPad mini, will begin to disappear, replaced by phones that are nearly equal in size.

Tablets were a revolution in consumer electronics, mainly because they made us realize how much more we could do with our portable touch screens. The first tablets, like the original iPad and the Google Nexus 10, were 10 inches, great for watching movies and TV shows. But despite rocketing sales growth at first, most people found that a laptop with a keyboard is still better for getting work done. And at 1.5 to 2 pounds, those early tablets were slightly big and heavy to hold for reading, or to carry around day to day.

Thus, the smaller tablet was born. Now, even those tablet sales have slowed. The research firm IDC predicts that tablet sales growth, though still expanding, will slow to the single digits by 2017, with sales of smaller tablets falling the fastest. It seems that many of us come to the conclusion I’ve reached of late: I don’t want a smaller tablet. I want a bigger phone.

Big phones may take some getting used to — they’re less pocketable and a little comical when used for actual talking — but they’re much more useful than small tablets for unifying your communications on one device. They’re always connected and more portable than a tablet, and the phone is already the device you’re using for texting, taking pictures and browsing the web. Why not a bigger screen for watching videos and reading email?

Our smartphones remain the center of our connected lives; bigger screens make them that much more useful and immersive, even if they may also require bigger pockets, purses and man purses. Embrace the phablet — and use Bluetooth for making calls. You’ll feel much less silly that way.

4 Qantas to cut 5,000 jobs (BBC) Struggling airline Qantas has announced plans to cut 5,000 jobs, after reporting a heavy financial loss. It is part of the Australian carrier's plans to cut costs by $1.8bn over the next three years. The cuts were announced alongside an underlying pre-tax loss of A$252m for the six months to the end of December.

The airline, which also plans to cut its fleet by more than 50 aircraft, said it faced tough competition in both international and domestic operations. Qantas chief executive Alan Joyce said he will be discussing the job cuts with the unions on Friday. In addition to redundancies, the airline will also be making changes to its fleet. Mr Joyce said Qantas will defer eight remaining Airbus A380 aircraft on order.

Qantas has been trying to convince the Australian government that it deserves financial backing, and that rules limiting foreign ownership of the airline to 49% should be relaxed to encourage overseas investment. It claims it is at a disadvantage because domestic rival Virgin Australia is largely owned by three government-backed operators - Air New Zealand, Etihad and Singapore Airlines.

Wednesday, February 26, 2014

The pain of Ukraine; US ranks low on work-life balance; India growth seen stuck below 5%

1 The pain of Ukraine (Mahir Ali in Khaleej Times) Ethnicity and linguistic affinity are not the only significant factors in Ukraine. It is all too easy to forget that during the disintegration of the Soviet Union and the disappearance of its Eastern European sphere of influence, the West broadly sought to assuage Moscow’s fear that the North Atlantic Treaty Organisation (Nato) would sooner or later swallow up the buffer states. It has signally failed to live up to that promise.

For Ukraine, there’s no getting away from Russia. At the same time, there is no reason why close ties with Moscow must necessarily be sacrificed in the interests of a closer relationship with the EU. It should be able to have it both ways without splitting up or being forced to choose between Vladimir Putin’s dictates and those of the International Monetary Fund — although the latter may come as a bigger shock.

Whether the presidential election now scheduled for May will provide the scenario for a happy ending to Ukraine’s travails remains to be seen. The potential exists, despite the far-right involvement in the protests of the past few months. However, a hands-off approach by not just Russia but the EU and the US may yield the least undesirable result.

After all, a truly democratic Ukraine requires all-round non-interference — and the possibility of fraternal relations with all of the nation’s neighbours. Last week’s bloodshed on the Maidan was disgusting, although not entirely one-sided. One cannot help wondering, though, whether heavyweight boxer Vitali Klitschko might be an appropriate contender for the presidential crown — not only because the US doesn’t approve of his ascendancy, but because he may be a suitable match, in one ring or another, for the martial arts aficionado who governs Russia with an iron fist.

2 US ranks low on work-life balance (Kathryn Roethel in San Francisco Chronicle) Americans work longer hours, have fewer vacation days and leisure hours, and spend as much or more time cooking, cleaning and caring for family as their international counterparts. This is according to the 2013 Better Life Index, compiled by the Organisation for Economic Co-operation and Development, a nongovernmental organization in France that tracks economic and social data from its economically developed member countries.

Compared with 36 other nations, the US is the only country that does not have a national paid leave policy for mothers and fathers after a baby is born. That factor played a big role in the county's low work-life balance rating, the index authors said. Maternity leave in the US is typically unpaid and generally 12 weeks long, which is shorter than average for Index countries. In Denmark, the country with the top work-life balance rating, both moms and dads can take up to a year off after a baby is born, and in some circumstances, the entire leave is paid.

The good news is poor work-life balance in the US doesn't seem to translate into poor quality of life overall. Americans were in the top half of the pack in the "life satisfaction" ranking, and the US was No. 1 in after-tax household income.

Here are the key numbers: The US ranked 28, out of 36, on the index list of countries with the best work-life balance. Denmark was No. 1, and Canada, New Zealand, Brazil and most European countries all outrank the US. Eleven per cent of Americans reported working more than 50 hours per week, which the index deems "very long hours." Nine percent of people in all Index countries said they worked very long hours, but in Denmark, the country with the best work-life balance rating, only 2 percent of workers put in this many hours on the job.

3 India growth seen stuck below 5% (Anant Vijay Kala in The Wall Street Journal) India’s economic expansion was likely stuck below 5% for the fifth consecutive quarter in the three months ended Dec. 31, indicating that the country is still struggling despite a few recent encouraging economic indicators. 
Gross domestic product in the last quarter of 2013 grew 4.9% from a year earlier, according to a poll of 16 economists by The Wall Street Journal. It grew 4.8% and 4.4% in the preceding two quarters. The Ministry of Statistics and Programme Implementation is scheduled to announce the GDP data at 5.30 p.m. on Friday. 

India’s pace of economic expansion has halved to a decade-low of 4.5% in the last fiscal year from about 9% till two years before that.  Overburdened infrastructure, rising borrowing costs, bureaucratic red-tape and uncertainty over tax policies have spooked consumers and corporations in Asia’s third largest economy. 

The news hasn’t been all bad though. Over the last two years, India has taken a series of measures, including allowing more foreign investment, to boost growth. Meanwhile inflation has eased and the country’s current account deficit has narrowed in recent months, helping create some optimism about India. Meanwhile improving demand in the US, Europe and Japan as well as a weakening rupee have helped Indian exports.

Any rebound, however, will likely be delayed at least until after national elections expected in May as investors are waiting for clarity on the economic policies of the next government.  Executives and economists are worried that an unstable coalition government, which is looking increasingly likely, would delay the much-needed revamping of regulations which restrict business.

Monday, February 24, 2014

Pentagon plans to shrink US military; 'This is not a recovery -- it is a bubble and it will burst'; Global dividends 'pass $1 trn'; India's Modi haunts Silicon Valley

1 Pentagon plans to shrink US military (BBC) Defence Secretary Chuck Hagel has unveiled plans to shrink the US Army to its smallest size since before the US entered World War Two. Outlining his budget plan, the Pentagon chief proposed trimming the active-duty Army to 440,000-450,000 personnel, down from 520,000 currently. The plan requires approval from Congress, which could change it. The US military is under pressure to downsize after two costly foreign wars.

Mr Hagel said at the Pentagon: "There are difficult decisions ahead. That is the reality we're living with." Noting the current US Army strength, Mr Hagel added: "Since we are no longer sizing the force for prolonged stability operations, an Army of this size is larger than required to meet the demands of our defence strategy." Reaction to the proposal was swift, with Republican members warning such cuts could hurt military readiness.

The proposed Army staffing levels would be the lowest since 1940, when the US was mobilising for WWII and employed 267,000 active-duty soldiers. The US entered that conflict in 1941 following the Japanese attack on Pearl Harbor. By the end of World War Two, there were 8.2 million active-duty US Army members, according to figures provided by the Pentagon. 

The figure peaked at 1.6 million both during the Korean War, in 1952, and during the Vietnam War, in 1968. The number was 482,000 in 2000, a year before the attacks of 11 September 2001. After those attacks, the force peaked at 566,000 in 2010.

2 'This is not a recovery, it is a bubble to burst' (Ha-Joon Chang in The Guardian) According to the stock market, the UK economy is in a boom. Not just any old boom, but a historic one. On 28 October 2013, the FTSE 100 index hit 6,734, breaching the 6,730 level achieved at the height of the economic boom before the 2008 global financial crisis, in October 2007.

The current levels of share prices are extraordinary considering the UK economy has not yet recovered the ground lost since the 2008 crash. The situation is even more worrying in the US. In March 2013, the Standard & Poor 500 stock market index reached the highest ever level, despite the fact that the country's per capita income had not yet recovered to its 2007 level. Since then, the index has risen about 20%, although the US per capita income has not increased even by 2% during the same period. This is definitely the biggest stock market bubble in modern history.

During the dotcom bubble, the predominant view was that the new information technology was about to completely revolutionise our economies for good. Given this, it was argued, stock markets would keep rising (possibly forever) and reach unprecedented levels. Few stock market investors really believe in these stories. They are aware that share prices are high mainly because of the huge amount of money sloshing around thanks to quantitative easing (QE), not because of the strength of the underlying real economy.

The result, unfortunately, is that stock market bubbles of historic proportion are developing in the US and the UK, the two most important stock markets in the world, threatening to create yet another financial crash. One obvious way of dealing with these bubbles is to take the excessive liquidity that is inflating them out of the system through a combination of tighter monetary policy and better financial regulation against stock market speculation. Of course, the danger here is that these policies may prick the bubble and create a mess.

In the longer run, however, the best way to deal with these bubbles is to revive the real economy. This will require a more sustainable increase in consumption based on rising wages rather than debts, greater productive investments that will expand the economy's ability to produce, and the introduction of financial regulation that will make banks lend more to productive enterprises than to consumers. Unfortunately, these are exactly the things that the current policymakers in the US and the UK don't want to do. We are heading for trouble.

3 Global dividends 'pass $ 1trn' (BBC) The dividends paid to shareholders around the world reached $1.03 trillion last year, according to research by Henderson Global Investors. The City investment management firm said worldwide dividend payments grew very slowly in 2013, at just 2.8%. But there has been a 43% rise in the value of global dividends since 2009.

Shareholder payouts have risen fastest in the past four years in the emerging markets, including China, though they have slowed down recently. A third of all dividends were paid by firms listed on US stock markets, with European-listed companies in second place.

The contribution of dividends to the total returns available to shareholders has always been very important. But that elementary fact was often overlooked in the past, when the booming stock markets in the 1980s and 1990s gave the false impression that rising share prices were all that mattered to investors.

Henderson pointed out that 9% of all dividends paid globally came from just 10 enormous companies in the oil, banking and telecoms industries, and that the world's top 20 dividend payers provided 16% of all shareholder payouts.

4 India's Modi haunts Silicon Valley (Kajal Basu in Khaleej Times) The spectre of Narendra Modi, India’s strongest prime ministerial contender, is flitting around California’s 17th congressional district (including Silicon Valley), which became the first majority Asian-American district in 2012. 

Asian Americans comprise 49.7 per cent of the district’s population of 702,904, of whom 37.8 per cent are of voting age. And it is overwhelmingly Democrat. In the fray are two anti-Modi Democrats: Sitting Rep Mike Honda, 72, a charismatic Congressman since 2001 and the bettors’ choice; and Rohit ‘Ro’ Khanna, 37, a charismatic maverick with a huge war chest.

There is also the Republican, Vanila Mathur Singh, 43, an untested anaesthesiologist/clinical associate professor at Stanford. Singh is pro-Modi (or was, until January 29, when she stated her “respect” for “the decisions made by the US State Department”).

In the 2012 assembly election, the Bharatiya Janata Party had polled 47.85 per cent of the 27,164,074 votes in Gujarat. In actuality, the differential was greater: About 28.58 per cent didn’t vote, reducing the BJP’s actual tally to 34.44 per cent, a far cry from a majority.

The paradox is that Modi was blocked by the Bush administration in 2005; today, the Good Old Party wants him in. And Democrats Honda and Khanna want him kept out. The Indian general election in April-May 2014 might soon render the issue academic, though were Modi to win, no US administration can afford to keep him in the outcast company of Sudanese President Omar Hassan Al Bashir and Vitaly Zakharchenko, Ukraine’s former minister of the interior.

Sunday, February 23, 2014

New era in Ukraine; Europe's 11m empty homes; Maria von Trapp no more; End of India's linguistic states

1 New era in Ukraine (The Australian) A new era has dawned in Ukraine as parliament appointed a pro-Western interim leader after ousted president Viktor Yanukovych fled Kiev to escape retribution for a week of deadly carnage. The ex-Soviet state's tumultuous three-month crisis culminated in a dizzying flurry of historic changes over the weekend that saw parliament sideline the pro-Russian head of state and call a new presidential poll for May 25.

Lawmakers then went a step further by approving the release from her seven-year jail sentence of former prime minister Yulia Tymoshenko — a star of the 2004 Orange Revolution who was thrown behind bars less than a year after Mr Yanukovych came to power in 2010. The constitutional legitimacy of parliament's actions remains an open question and Mr Yanukovych vowed in a taped interview to fight the “bandits” who now claimed to rule Ukraine.

But Mr Yanukovych's authority was nowhere in evidence in Kiev on Sunday. The city's police presence had vanished and protesters were in control of everything from traffic management to protection of government buildings after a week of bloodshed that claimed nearly 100 lives. Mr Yanukovych was dealt another blow when his own Regions Party condemned him for issuing “criminal orders” that led to so many deaths.

Western countries gave cautious but vital backing to the sweeping changes in Ukraine, while Russia once again warned that payment of its huge bailout package was on hold. Ms Tymoshenko has rejected consideration for the post of prime minister in the new interim cabinet — a comment that reignited speculation she was intent on nothing less than head of state. The opposition's main presidential challenge had until this weekend been primarily expected to come from boxer-turned-lawmaker Vitali Klitschko.

2 Europe's 11m empty homes (Rupert Neate in The Guardian) More than 11m homes lie empty across Europe – enough to house all of the continent's homeless twice over – according to figures collated by the Guardian from across the EU. In Spain more than 3.4m homes lie vacant, in excess of 2m homes are empty in each of France and Italy, 1.8m in Germany and more than 700,000 in the UK.

There are also a large numbers of vacant homes in Ireland, Greece, Portugal and several other countries, according to information collated by the Guardian. Many of the homes are in vast holiday resorts built in the feverish housing boom in the run up to the 2007-08 financial crisis – and have never been occupied. On top of the 11m empty homes – many of which were bought as investments by people who never intended to live in them – hundreds of thousands of half-built homes have been bulldozed in an attempt to shore up the prices of existing properties.

Freek Spinnewijn, director of FEANTSA, an umbrella organisation of homelessness bodies across Europe, said it was a scandal that so many homes have been allowed to lie empty. "You would only need half of them to end homelessness," he said. "Governments should do as much as possible to put empty homes on the market. The problem of homelessness is getting worse across the whole of the European Union. The best way to resolve it is to put empty homes on the market."

Most of Europe's empty homes are in Spain, which saw the biggest construction boom in the mid-2000s fed largely by Britons and Germans buying homes in the sun. The latest Spanish census, published last year, indicated that more than 3.4m homes – 14% of all properties – were vacant. The number of empty homes has risen by more than 10% in the past decade.

3 Maria von Trapp no more (The Guardian) The last surviving member of the famous Trapp Family Singers made famous in The Sound of Music has died at her home in Vermont, aged 99. Von Trapp's brother, Johannes von Trapp, said she died on Tuesday. He called her a "lovely woman who was one of the few truly good people".

The family won acclaim throughout Europe for their singing and escaped from Nazi-occupied Austria in 1938. Their story was turned into the film and Broadway musical. Maria von Trapp was the third child and second-oldest daughter of Austrian naval captain Georg von Trapp and his first wife, Agathe Whitehead von Trapp. Their seven children were the basis for the singing family in the 1959 Broadway musical and 1965 film, which won the Oscar for best picture. Maria von Trapp was portrayed as Louisa in the film and musical.

The Sound of Music was based loosely on a 1949 book by Georg von Trapp's second wife, also Maria von Trapp, who died in 1987. It tells the story of an Austrian woman who married a widower with seven children and taught them music. In 1938, the family escaped from Nazi-occupied Austria. After they arrived in New York, the family became popular with concert audiences. The family eventually settled in Vermont, where they opened a ski lodge in Stowe.

4 End of India's linguistic states (MJ Akbar in Khaleej Times) There will be a 30th state in the union of India. The 29th, Telangana, is not the last post in the reorganisation of India’s internal map, set in motion, ironically, in 1952 by a fast-unto-death undertaken by a Gandhian called Potti Sreeramulu. It was for the creation of Andhra Pradesh, a merger of the Telugu-speaking districts of Madras province with Hyderabad, the state ruled by the Nizam.

 The concept of states carved along the dotted lines of language, as opposed to existing “administrative convenience”, was formally confirmed in 1955 by the States Reorganisation Commission headed by Sayyid Fazl Ali. The emotional strength of regional identity prevailed over the requirements of governance.

The creation of Telangana effectively ends linguistic states as a template. Governance and economic disparity will be the new and only rationale. Telangana and Seemandhra speak the same tongue. This has happened before. Uttarakhand spoke the same language as Uttar Pradesh, dialect variations apart, and used the same script. But this was an exception. Jharkhand and Chhattisgarh were created around ethnicity.

Future separation will revolve around economic incompatibility, spurred by the charge of bias in development. When the hurly-burly’s done, when the battle’s lost and won, we need to answer the most basic of questions: Is a smaller state any guarantee of good governance?