Monday, July 14, 2014

IMF fears deflation in eurozone; US loses trade spat to China, India; Why India youth are well fed and malnourished; After World Cup, back to reality for Brazil

1 IMF fears deflation in Eurozone (Katie Allen in The Guardian) The eurozone recovery is weak, its financial markets too fragmented, and the region risks falling into deflation, the International Monetary Fund has warned. The IMF urged members to shore up the single currency bloc, including repairing bank balance sheets and stepping up reforms to boost employment. It repeated a recommendation that the European Central Bank should be ready for quantitative easing should inflation stay too low.

The Washington-based body concluded after its latest visit to the region that the euro area recovery was taking hold and action by national politicians and the ECB had helped boost investor confidence. But the euro-skeptic outcome of the European elections posed risks to the single market and the economic recovery was "neither robust nor sufficiently strong".

"The recovery is weak and uneven. Inflation has been too low for too long, financial markets are still fragmented, and structural gaps persist: these hinder rebalancing and substantial reductions in debt and unemployment," said the report. The IMF highlighted "lingering damage" from the crisis, such as high unemployment, particularly among young people, and said that activity and investment were yet to return to pre-downturn levels.


2 US loses trade spat to China, India (BBC) The World Trade Organisation (WTO) has found the United States violated global trade rules when it imposed tariffs on products from China and India. In response to a 2012 complaint, the WTO said the US improperly imposed tariffs on Chinese steel and solar panels.

In a separate ruling, it said the US must change the way it imposes tariffs on India steel products. The US is embroiled in several trade spats with China and India. However, the WTO did not agree with all of the complaints filed by India and China.

The US - which has argued it imposed the tariffs to combat artificially low prices on products from India and China's state-subsidised industries - has the right to appeal the ruling.


3 Why India youth are well fed and malnourished (Gardiner Harris in The New York Times) Two years ago, Unicef, the World Health Organization and the World Bank released a major report on child malnutrition that focused entirely on a lack of food. Sanitation was not mentioned. Now, Unicef officials and those from other major charitable organizations said in interviews that they believe that poor sanitation may cause more than half of the world’s stunting problem.

This research has quietly swept through many of the world’s nutrition and donor organizations in part because it resolves a great mystery: Why are Indian children so much more malnourished than their poorer counterparts in sub-Saharan Africa?

A child raised in India is far more likely to be malnourished than one from the Democratic Republic of Congo, Zimbabwe or Somalia, the planet’s poorest countries. Stunting afflicts 65 million Indian children under the age of 5, including a third of children from the country’s richest families. This disconnect between wealth and malnutrition is so striking that economists have concluded that economic growth does almost nothing to reduce malnutrition.

Half of India’s population, or at least 620 million people, defecate outdoors. And while this share has declined slightly in the past decade, an analysis of census data shows that rapid population growth has meant that most Indians are being exposed to more human waste than ever before.

India is an increasingly risky place to raise children. The country’s sanitation and air quality are among the worst in the world. Parasitic diseases and infections like tuberculosis, often linked with poor sanitation, are most common in India. More than one in four newborn deaths occur in India. Open defecation has long been an issue in India. Some ancient Hindu texts advised people to relieve themselves far from home, a practice that Gandhi sought to curb.

 “We need a cultural revolution in this country to completely change people’s attitudes toward sanitation and hygiene,” said Jairam Ramesh, an economist and former sanitation minister. Better sanitation in the West during the 19th and early 20th centuries led to huge improvements in health long before the advent of vaccines and antibiotics, and researchers have long known that childhood environments play a crucial role in child death and adult height.


4 After World Cup, back to reality for Brazil (Straits Times) After the soccer World Cup, football-mad Brazil has to get back to normal, daily life. Although Brazil is still suffering after the team's ignominious Cup exit, the country's inbuilt festive spirit means it will not be down for long.

Next stop is the election in October when leftist President Dilma Rousseff, the frontrunner in opinion polls, will be seeking re-election. Rousseff enjoys a healthy lead over her rivals with the latest poll giving her 38 per cent of voter support, compared to 20 per cent for Social Democratic Senator Aecio Neves and nine per cent for socialist former governor Eduardo Campos.

The national team's terrible tournament may not affect Rousseff in the elections, which coincide with World Cup years in Brazil. In 1998, when Brazil slumped 3-0 in the final to France, Fernando Henrique Cardoso was re-elected. Then in 2002, when Brazil won their most recent title against Germany, Cardoso's ruling party lost to Luiz Inacio Lula da Silva of Rousseff's Workers Party (PT). Lula was then re-elected even through Brazil performed poorly in Germany in 2006.

After Brazil was eliminated in the quarter-finals in 2010 in South Africa, Rousseff successfully picked up the baton from Lula. In the end, Brazilians are more worried about their pocketbooks than the scoreboard. "I think the biggest risk for Rousseff in this election remains the economy, not the World Cup," said Joao Augusto de Castro Neves, the Latin America director for the Eurasia Group think tank.

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