1 German surplus and Eurozone stagnation (Robert
Skidelsky in The Guardian) While the rest of the world recovers from the great
recession of 2008-2009, Europe is stagnating. Eurozone growth is expected to be
1.7% next year. What can be done about it? One solution is a weaker euro.
Earlier this month, the chief executive of Airbus called for drastic action to
reduce the value of the euro against the dollar by about 10%, from a
"crazy" $1.35 to between $1.20 and $1.25.
The pattern of current account imbalances across the
eurozone also plays a large role. Germany's current-account surplus, the
largest in the eurozone, is not a new phenomenon. It has existed since the
1980s, falling only during reunification, when intensive construction
investment in the former east Germany more than absorbed the country's savings.
Now, however, countries previously stricken with
deficits are moving into surplus, which means the eurozone's current account is
increasingly positive. Indeed, the eurozone-wide surplus is now expected to be
2.25% of GDP this year and next. The eurozone is saving more than it is
investing, or, equivalently, exporting more than it is importing. This is
strengthening its currency.
If the surplus country takes no steps to reduce its
surplus – for example, by increasing its domestic investment and consumption –
the only way the deficit country can reduce its deficit is by cutting its own
investment and consumption. But this would produce a "bad"
equilibrium, achieved by stagnation.
Something like this seems to have happened in the
eurozone. Germany has retained its "good" surplus, whereas the
Mediterranean countries slashed their deficits by cutting investment,
consumption, and imports. Greece's unemployment rate soared to nearly 27%,
Spain's is almost as high, and Portugal faces a banking crisis.
2 Acknowledging the era of flexi-work (Straits
Times) Clocking in and out at a preset workplace is a hangover from a different
era. Now, the economy demands flexibility from the workforce - for example,
working at odd hours or different locations. Yet, organisational cultures often
cling to the past, despite a fillip to flexible work arrangements given by the government
and labour movement. Under the Singapore Manpower Ministry's Work-Life Grant
scheme, firms can receive as much as $40,000 for launching flexi programmes.
The latest Randstad World of Work Report revealed
that only 20 per cent of Singapore employers would adopt flexi work to deal
with talent woes - "significantly lower than other developed economies in
the region". Anecdotal evidence implicates work culture in the slow
adoption of variable work hours, job-sharing or working from home. Almost six
in 10 bosses polled fret over productivity.
Clearly, a cultural change is needed and this is a
function of factors like new skill sets imparted across the organisation - from
the C-suite to the shopfloor. For example, target setting needs to be more
detailed and the process of adding value more explicit. Importantly, a culture
of trust must be developed so staff do not shun flexi work out of fear it could
be career-limiting. This is an exercise worth pursuing not just to hone
collaborative skills within an organisation but also to further the larger
social objective of enhancing the pro-family environment here.
3 Hunger in South Sudan (Khaleej Times) Far away from the
flashpoints of Syria, Iraq and Ukraine, there is an altogether different world
that is away from the glare of media spotlight. This is the Dark Continent of the 21st century
where diseases like the Ebola, hunger and famine dwarf the people for all times
to come. According to reports, there are at least four million hungry mouths to
feed in South Sudan alone, and the newly liberated African country is at the
verge of collapse.
The
situation is one of Rwanda and Congo of yesteryears where thousands were slaughtered
and millions starved to death under adverse circumstances. What started off as a
political skirmish between two factions of society as deputy president Riek
Machar differed with his boss, Salva Kiir, is now a full-blown upheaval. The
international community has once again failed to deliver and a host of
agreements and understandings reached between them under the African Union and
the United Nations aegis in Ethiopia had fallen flat on surface.
The
$618 million aid pledges by the world community is nowhere in sight, and it is
feared that at least 50,000 children might die by the end of the year — if
nothing is done to tame the catastrophic food insecurity.
The
statistics for Juba are horrible: more than a million on the move, thousands
killed in gun fight, the writ of the government nowhere in sight, thugs
controlling its international trade and the country’s food basket incapable to
feed its hungry mouths. What needs to be underscored is the fact that Juba’s
fallout will not be restricted to its territory but also have an impact across
the impoverished continent. It is a serious security threat, which is not limited
to Africa. As Gaza, Mosul and eastern Ukraine massacres went unheeded, there is
little hope that Juba will figure on the map of world conscience.
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