Wednesday, April 29, 2015
Shock, as US economy grows just 0.2%; A 100-year education gap between nations; Nepal will rise again
1 Shock, as US economy grows just 0.2% (The Guardian) The disappointing US GDP data has sent markets tumbling. The weakness in the US economy, if sustained, poses problems for global growth. That has hit the dollar, and by extension pushed the euro higher which has undermined European markets.
The export heavy Dax has been hit particularly hard, while the FTSE 100 has closed below 7000 for the first time in nearly two weeks. There were also the usual uncertainties surrounding the continuing attempts to avoid Greece defaulting and the forthcoming UK election.
Pending home sales - contracts to buy previously owned US homes - rose to their highest level since June 2013 in March, the third monthly rise in a row. The National Association of Realtors said its sales index rose 1.1% to 108.6 last month, compared to forecast of a1% gain. The association’s chief economist Lawrence Yun said more buyers than usual had entered the spring market.
Earlier, official figures showed German inflation picked up to 0.3% in April, the second month of price growth after deflation in January and February. And Belgium also exited deflation. Looks like the European Central Bank’s policy is working. It launched a £60bn a month quantitative easing programme in March to fight deflation.
2 A 100-year gap in education between nations (Rebecca Winthrop on BBC) When it comes to education the differences between the developed and developing worlds remain stark. There has been a convergence in the number of pupils enrolling in primary school, with many more young children in developing countries now having access to school.
But when it comes to average levels of attainment - how much children have learnt and how long they have spent in school - there remains a massive gap. When it's shown as an average number of years in school and levels of achievement, the developing world is about 100 years behind developed countries. These poorer countries still have average levels of education in the 21st Century that were achieved in many western countries by the early decades of the 20th Century.
If we continue with the current approaches to global education, this century-wide gap will continue into the future. There are stark overall differences between the average levels of education between the developing and developed countries - a comparison which uses the UN definition of "developed" as Europe, North America, Japan and Australia.
The idea that all young people, not just those in the elite, should have an opportunity to be educated had spread across Europe and North America by the middle of the 19th Century. It was only a century later, spurred on by the 1948 Universal Declaration of Human Rights, that mass schooling spread across the developing world. It meant that there was a 100-year gap there from the outset.
The education levels of the adult workforce, often measured by average numbers of years of school, is in the developed countries double that of their developing country peers. In developed countries, adults have an average of 12 years of school, compared with 6.5 years of school for those in developing countries.
The 100-year gap is also evident in the learning levels between students in developed and developing countries. At the current rate of progress, it will take well over 100 years for students in developing countries to catch up to the learning levels of today's developed country students.
The real question is what can be done to close the gap? Can some of the evolutionary steps be skipped to make more rapid progress? Or is there a technological way for education systems to "leapfrog" a few stages forward? Can we envision a world where it does not take developing countries 50 or another 100 years to catch up?
3 Nepal will rise again (Pranaya SJB Rana in Dawn/The Kathmandu Post) Nepal slept uneasy on Saturday night, away from homes and buildings and under open skies. Throughout the night, the fitful sleep of those who survived Saturday’s catastrophic 7.8 earthquake was disturbed constantly by the earth rocking to and fro.
The Sunday morning sun rose on a nation devastated, its centuries-old history turned into rubble and its people scared into huddled masses. Out on the main streets, it was locals who were conspicuously doing what needed to be done. Security agencies initially were caught just as unprepared as locals; only, it looked as if locals recovered faster.
Of course, all this is not to downplay all the great work that the police and the Army have done. They too braved much risk to undertake rescue efforts. What was evident on Saturday and much of Sunday was Nepal’s, and especially Kathmandu’s, lack of preparedness for a disaster that so many had warned about for so long.
But what also became evident was just how resilient and resourceful Nepalis are. Besides the material support that locals provide to each other, there is the emotional and psychological element, especially when there is little reliable information and all that one can hear are doomsayers predicting bigger quakes with every hour that passes. In the face of uncertainty and fear, an ear to talk to and a shoulder to lean on can be as valuable as any material relief.
Some markers of our heritage are now gone forever and whatever reconstruction that will take place in the months and years to come will doubtful equal the grandeur of the old. There are countless lessons here for us all, if only we are willing to learn. A city is only as resilient as its people and no matter what we lose, as long as we have the people, we will rebuild and we will recover.
Many of the thousands of deaths were perhaps preventable, had building codes been enforced and retrofitting conducted on a war footing. It is not as if we didn’t have enough warning; we just lived as if we were invulnerable. But those of us who have survived, must and will soldier on, if only in memory of all that we have lost.
Tuesday, April 28, 2015
First time since 2009, Europe is best place to invest; Maths until 18 seen as best protection against unemployment; Venezuela cuts hours to save energy
1 First time since 2009, Europe is best place to invest (Straits Times) Europe gets the nod as the best place to invest for the first time since at least 2009 in a Bloomberg survey of financial professionals, unseating the US. Thirty-five per cent of those surveyed said the euro zone would be among the one or two markets offering investors the best opportunities over the next 12 months.
It was the first time that Europe came out on top since the survey of traders, analysts, money managers and executives who are Bloomberg customers began asking that question in October 2009. The US, with a 33 per cent share, fell to second, the first time it's not been number one since November 2010. China, which was respondents' top choice back then, now is viewed as one of the worst markets to invest in.
2 Maths until 18 seen as best protection against unemployment (Richard Adams in The Guardian) The UK Labour party’s plans to ensure all pupils in England continue to study maths past the age of 16 have been endorsed by leading mathematicians and policymakers, who argued that improved numeracy skills were the “best protection” against unemployment for young people.
Tristram Hunt, the shadow education secretary, said all pupils at school would have to continue to study maths as part of Labour’s proposals, including an estimated 250,000 each year who pass GCSE maths with a C grade or higher but did not go on study maths at A-level.
Currently, only those who failed maths at GCSE or equivalent levels have to continue studying the subject after the age of 16 in order to resit the examinations, which Hunt criticised as “a staggering degree of complacency”. Recent research by the OECD found that a quarter of adults in England have the maths skills of a 10-year-old.
“It is vital that we all become numerate; international research from the OECD has shown that good numeracy is the best protection against unemployment, low wages and poor health,” Mike Ellicock, chief executive of National Numeracy said. Only about 20% of young people in England continue to study maths after taking GCSEs, compared with 90% of pupils in Germany and Hong Kong who continue after the age of 16.
3 Venezuela cuts hours to save energy (BBC) Venezuela says it will cut the working day for public sector workers to five-and-a-half hours to conserve energy, down from eight to nine hours. The initiative is part of a nationwide electricity rationing plan.
Vice-President Jorge Arreaza said private companies would be asked to use their own generators to reduce pressure on the national grid. Last week the government claimed that energy problems were due to maintenance issues, but the opposition criticised the government for not investing enough in the energy sector.
Power outages are common in Venezuela, which is a big oil producer but depends heavily on hydro-electric power. Venezuela is also struggling with an economy in recession that has been hard hit by the fall in the price of oil. Some 96% of its export revenues are reported to come from oil. Inflation is also high, and stood at more than 60% in 2014.
Monday, April 27, 2015
1 Record revenues for Apple (Dominic Rushe & Sam Thielman in The Guardian) Apple sold 61.2m iPhones in first three months of 2015, reporting revenues of $58bn as strong sales from China propelled the tech company to another record quarter.
Analysts had expected Apple to sell 58.1m iPhones and for the company to report revenues of $56bn. The number far exceeded the 43.7m iPhones that Apple sold in the same period a year ago. Revenue from China rose 71% to $16.82bn. That compares with $21.3bn in the Americas region, which was up 19%. Tim Cook, Apple’s chief executive, has previously predicted that China will become Apple’s largest market.
Cook said the company had an “incredible quarter” in China driven in large part by iPhone sales. Sales of Macs rose 31% in China. Cook said the company had benefitted from an expansion its physical retail and online presence in the country. With a net operating profit of $13.6bn, a 33% increase, the only fly in the ointment is the continued decline of iPad sales, off year-over-year for the second quarter running.
The company ended the quarter with $193.5bn in cash. Apple announced an 11% increase in its dividend and the addition of another $50bn to its share buyback program. The company will now return $200bn to shareholders by March 2017.
2 Baltimore protests spread (BBC) A curfew has been declared in the US city of Baltimore amid violent protests over the death of a black man fatally injured in police custody. After dark, live video from helicopters showed several buildings in central Baltimore on fire. Earlier, dozens of people were seen confronting police, and 15 officers were injured.
The governor of Maryland declared a state of emergency, calling in the national guard as clashes intensified. African American Freddie Gray, 25, died on 19 April after a week in a coma. Where and when his injuries were sustained is being investigated by the justice department. Officials have suspended six police officers who were involved in the case.
Governor Larry Hogan issued an executive order to "protect the lives and property of citizens being impacted by this public emergency". Capt Eric Kowalczyk of Baltimore Police said the 15 injured officers were wounded by thrown objects including bricks and bottles. Two remain in hospital.
3 Robo-cop on the beat (Khaleej Times) Dubai is no Detroit from Hollywood, but their futures will intersect when robo-cops patrol the streets of this city. If you’ve watched the original Robocop starring Peter Weller, it won’t be hard to imagine a day when policing passes to a posse of robots who walk the streets and malls in Dubai and follow a set of commands to keep the peace, watch the surroundings and help catch the bad guys.
This revolution in law enforcement is expected to happen before Dubai hosts the Expo in 2020 when the city expects an influx of people. People will have fun dealing with the robots of the police force, officials said. The machines will interact directly with people and tourists. An interactive screen for a face and a microphone will transmit and receive commands from the Dubai Police call centres.
The robots will be further developed to take decisions on their own without help from human controllers, according to police officials. Dubai Police hope to replace more men and women on the force with these robots, and bring down the costs of policing. Knightscope, a Silicon Valley company, has already developed a version of the robo-cop, which can detect and track criminal activity. But a weaponised robo-cop has raked up controversy, with many experts warning they could turn rogue if not used wisely.
Dubai’s own robo-cops could be equipped with sensors for thermal imaging, they could read your vehicle’s licence plate and scan your facial features. How far authorities would go with a robot police force without intruding into your personal space is an issue open to debate. But if you’re not averse to trading your privacy for the security and safety of the community, robo-cops could well be the future of modern policing.
Sunday, April 26, 2015
America's place in a multi-polar world; UK university class sizes are falling; India's farms as killing fields
1 America’s place in a multi-polar world (Linda Yueh on BBC) At a global conference a few years ago, former US Treasury Secretary Larry Summers revealed that Americans would really prefer to be the G1. Not the G7 grouping of the biggest economies, or even the G3, but the G1 - where America would be the sole decision-maker.
A big sign of the shift was when the British and other Europeans, as well as allies such as Australia and South Korea, all signed up to the China-led Asian Infrastructure Investment Bank (AIIB) to be founding members.
For countries who were rescued by the Bretton Woods institutions based in Washington DC (the IMF and the World Bank) just a decade and a half ago during the Asian financial crisis, it is quite a shift that south east Asia now see themselves as competitors to the world's biggest economy. The confidence of Asians - not just the Chinese but other Asians too - is notable.
Now, there's not only the AIIB, there's also the Brics bank that is set up by the emerging markets of Brazil, Russia, India, China and South Africa. Perhaps that's one sign of declining influence. After all, America as the sole superpower holds effective vetoes over the main multilateral institutions which have led not only development but how countries are rescued and economies are managed for most of the past century. Those days look numbered as China in particular wields its economic muscle globally.
For some economists, this isn't surprising. The weight of global economic activity has been shifting East. Having another engine of demand surely helps a world economy that is struggling to get back to robust growth rates after the 2008 financial crisis. Wouldn't Americans like to have other nations shoulder some of that burden?
Of course, America will remain in the spotlight. But it's the relative decline of power that stings. After all, the Brits and other nations decided that any political repercussions from a displeased America weren't enough to outweigh the economic gains of supporting China.
For the US, it's hard to get used to not being the sole superpower. The AIIB and Brics bank sitting alongside the World Bank and IMF will be stark reminders. Britain was overtaken by America in the early part of the last century. Perhaps there are lessons to share there.
2 UK university class sizes are falling (The Guardian) Universities are spending more on facilities and class sizes are falling, a study has found. The amount of money committed to areas such as sport, careers services, health and counselling has steadily increased over the five years of the coalition government, researchers said.
Analysis by the Complete University Guide shows that there was an initial worsening in staff-to-student ratios after 2010, followed by an improvement across the whole of the UK that began with the introduction of fees of up to £9,000 a year in England.
The most recent figures, for 2013-14, suggest there is an average of 17.08 students per member of staff. In Wales the ratio worsened slightly between 2012 and 2013 before a reduction last year.
More graduates are receiving “good” honours degrees, with 70% achieving first or upper second class honours – up from 68% last year – while student satisfaction has also increased.
Dr Bernard Kingston, principal author of the Complete University Guide, said: “UK students seem to be getting a better deal for their higher tuition fees in almost every area. It remains to be seen how far this trend can continue but in the short term at least, students are benefiting from spending on facilities that affect them directly.”
In this year’s table the top three are unchanged, with the University of Cambridge retaining first place in the ranking of 126 universities, the University of Oxford second and the London School of Economics and Political Science third.
3 India’s farms as killing fields (Neeta Lal in Khaleej Times) This year’s harvest festival of Baisakhi in India had a decidedly funereal ring to it. Reports of farmers’ suicides, distress sales of farm produce and land to pay off debts kept trickling in from all corners of India. According to unofficial estimates, over 200 farmers have either committed suicide or died of shock over the last five weeks.
What had led to this large-scale rural distress is a toxic cocktail of a dramatic plummet in global commodity prices of cotton, wheat, basmati rice, sugarcane, tea and rubber and unseasonal rains that have ravaged verdant fields. The ruling political dispensation’s imprudent agrarian policies haven’t helped. The pan-India rural employment guarantee scheme has been severely curtailed, crop procurement has been restricted and states have been asked not to give bonuses to farmers as per an executive order from the central government.
Though agriculture contributes just 14 per cent to India’s GDP, it employs a whopping 49 per cent of the country’s workforce. About 80 per cent of Indian farmers are small and marginal which makes their cost of production very high. The recent Land Acquisition Bill Amendment has further undermined farmers’ interests by offering them a meagre recompense for acquiring their land.
The writing on the wall is clear. If the Indian economy is to sustain its current positive growth momentum, agriculture reforms need to be initiated pronto. Delays will not only harm the farming community, building up a greater groundswell of angst against the government, but also have a cascading effect on GDP growth. Rather than funnel billions more into ill-thought out subsidy programmes, the government should accelerate investments in irrigation, which will have a more positive impact on farming.
Saturday, April 25, 2015
Volkswagen chief quits in power struggle; Tesco's fall and failing capitalism; Saigon has fallen -- A reporter's view, 40 years later
1 Volkswagen chief quits in power struggle (BBC) The chairman of carmaker Volkswagen (VW), Ferdinand Piech, has resigned after a power struggle with chief executive Martin Winterkorn.Mr Piech had criticised his chief executive in an interview with the German news magazine Der Spiegel, but did not specify the issue at stake.
Mr Winterkorn has been widely tipped as VW's next chairman. Mr Piech and the Porsche family control 51% of VW. Volkswagen is the biggest car manufacturer in Europe. On 17 April, Volkswagen's five-member governing board gave its backing to Mr Winterkorn.
Board member Wolfgang Porsche, a cousin of Mr Piech, said he had given his "personal opinion" without clearing his remarks with other family members. Mr Piech, 78, is a former VW chief executive. His wife Ursula has also resigned her seat on the board.
During his eight-year tenure as chief executive, Mr Winterkorn has overhauled VW and made it one of the world's most successful carmakers, industry analysts say. In 2014, VW was the world's second-biggest carmaker by sales, behind Toyota and ahead of GM. Apart from Volkswagen, the group's brands include Audi, Porsche, Lamborghini, Bugatti, Bentley, Skoda and Seat.
2 Tesco’s fall and failing capitalism (Will Hutton in The Guardian) It is the sixth biggest corporate loss in British history and the largest ever in British retailing, just the latest in a lengthening list of disasters. Tesco’s £6.4bn fall from grace is in the same league as BP’s multibillion-dollar compensation for the oil spills in the Gulf of Mexico (though not quite up there with RBS’s bankruptcy in 2008).
Of course, companies make mistakes: their rise and fall is a healthy and inevitable part of the rhythm of capitalism. But Tesco’s travails go beyond that. They are part of a larger pattern that takes us to the heart of how our economy and society are run. This is now not only revealing itself as a breakdown of trust in business, but seeping into the fragmentation of support for our principal parties and the accompanying dysfunctional political system.
Run a country in the interests of the top 0.1% and sooner or later something gives. In fairness, part of Tesco’s problem is that Britain’s retailing landscape is being transformed by two different challenges – online shopping and discount retailers Aldi and Lidl, whose market share has doubled in the past five years to more than 10%.
But Aldi’s and Lidl’s success is rooted in something more profound than just capitalising on newly cost-conscious, financially pressed consumers. They are privately owned businesses that think long term and whose business purpose, enshrined by the owners, is to focus on a very narrow range of goods they can sell at high volumes and thus price incredibly keenly.
But Tesco’s initial response was not even to try – it was to wangle its financial numbers, exploiting its market dominance. Essentially, it offered its suppliers numerous wheezes – all of which Tesco charged for – to position their goods on its shelves slightly more advantageously than others. It then booked the profits early and now has set aside £200m for overstating profits, as well as suffering inquiries from the Serious Fraud Office. Among other write-downs, it wants to close its current pension scheme, which offers guaranteed pensions, to be replaced by one that displaces all the investment risk on to its workers.
Tesco is not alone. This is how too much of business works in 2015. The justification of capitalism is not that it enriches the top 0.1% and the wealth trickles down. Its justification is that a plurality of companies experiment in solving human problems and so create worthwhile value, which capitalism can do better than any other system. Tesco went wrong because of a very particular British ownership and financial architecture that places no value on this social, human mission but sees its duty as only to maximise the share price for a floating body of shareholders. And now Tesco is trying to reinvent itself in the same hostile system.
3 Saigon has fallen: A reporter’s view, 40 years later (Peter Arnett in San Francisco Chronicle) Editor’s note: More than two decades of war in Vietnam, first involving the French and then the Americans, ended with the last days of April 1975. Peter Arnett, who won a Pulitzer Prize for his coverage of combat for The Associated Press has written a new memoir, "Saigon Has Fallen." This is an edited excerpt, focused on the war's final throes.
Artillery explosions sound a fearsome 4 a.m. wake-up call, but I'm already awake. The attackers waiting at the gates of a vanquished Saigon have been warning they would act, and now with each thump of the Soviet-made 130mm guns, sound waves rustle the curtains of my open seventh floor hotel window. The last full day of the Vietnam War is beginning.
At the American Embassy, Ambassador Graham Martin is in disbelief, committed as he is to evacuating as many vulnerable Vietnamese as possible before the communists arrive. He insists on personally checking the airport tarmac. Those waiting to depart include the large contingent of international journalists covering the story. Some have considered the possibility of remaining behind and seeing what transpires. I message AP president Wes Gallagher, explaining that because I was here at the war's beginnings it's worth the risk to document the final hours. Gallagher agrees. Three of us will stay.
As I drive through the city, I see crowds gathering at intersections and arguing. Several million people are now estimated to be living in Saigon, many of them recent refugees from the countryside. Not everyone wants to leave, but several hundred thousand believe their lives have been compromised in the eyes of the communists by their association with America and its policies, and are desperate to get out.
The main crisis unfolds in and around the US Embassy, a six-story building with a concrete lattice facade that serves to keep the building cool and deflect incoming missiles. When the helicopters start emerging from the leaden afternoon skies to pick up the chosen few, a stampede begins. By late afternoon an estimated 10,000 desperate Vietnamese have advanced on the embassy, shoving to get close to the iron gates and the high walls, and when they do get there, endeavoring to claw themselves over.
That evening, I write a story for the AP that begins: "Ten years ago I watched the first US Marines arrive to help Vietnam. They were greeted on the beaches by pretty Vietnamese girls in white silken robes who draped flower garlands about their necks. A decade has passed, and on Tuesday I watched the US Marines shepherding Americans out of South Vietnam.
I notice a group of South Vietnamese soldiers running down a side street, kicking off their uniforms, tossing their weapons into shop doorways. I run back to the AP office, my heart beating wildly as I scramble up the narrow stairways. I shout, "Saigon has fallen. Call New York."
I check my watch. It's 11:43 am. I type up a news bulletin about what I've just seen and hand it our Vietnamese telex operator, Tammy. He reads it and rises from his chair in alarm. He's looking at the door. I push him down and order him to send my bulletin. He does, then bolts out of the office, and we never see him again.
I write: "In 13 years of covering the Vietnam War I never dreamed it would end as it did at noon today. I thought it might end with a political deal like in Laos. Even an Armageddon-type battle with the city left in ruins. But a total surrender followed a short two hours later with a cordial meeting in the AP office in Saigon with an armed and battle-garbed North Vietnamese officer with his aide - and over a warm Coke and stale pound cake at that? That is how the Vietnam War ended for me today."
The tape stops running. I punch a few keys but the machine just coughs a couple of times. I try the key again, no response. The AP wire from Saigon to New York is down - and out. The new authorities have pulled the plug.
Nasdaq, S&P 500 close at records; Hundreds dead, Everest shaken in Nepal quake; When men crave for the youthful look
1 Nasdaq, S&P 500 at record close (BBC) The Nasdaq and S&P 500 closed at new record highs after US tech firms reported strong first quarter profits. The index rose 36.02 points to close at 5,092.08. It ended Thursday at a record high, surpassing a level it last reached in 2000 at the height of the dot-com bubble. The S&P 500 index gained 4.76 points to 2,117.69, a new high.
The Dow Jones added 21.45 points to finish the week at 18,080.14. Amazon was the biggest winner on the Nasdaq. It boosted the tech-heavy index significantly, after shares in the firm rose by more than 14%, in the wake of revelations about its cloud computing services. The company's value now stands at $206.7bn (£136.1bn).
The Dow's leader was Microsoft, which saw its share price spike over 10% after it beat growth expectations. Xerox was one of the biggest losers on the Nasdaq, closing down 8.75%. On Thursday, the office supplies company reported a 6% fall in quarterly revenue.
2 Hundreds dead, Everest shaken in Nepal quake (San Francisco Chronicle) A powerful earthquake struck Nepal Saturday, killing at least 906 people across a swath of four countries as the violently shaking earth collapsed houses, leveled centuries-old temples and triggered avalanches on Mt. Everest. It was the worst tremor to hit the poor South Asian nation in over 80 years.
At least 876 people were confirmed dead in Nepal, according to the police. Another 20 were killed in India, six in Tibet and two in Bangladesh. Two Chinese citizens died at the Nepal-China border.
It was a few minutes before noon when the quake, with a preliminary magnitude of 7.8, began to rumble across the densely populated Kathmandu Valley, rippling through the capital Kathmandu and spreading in all directions -- north toward the Himalayas and Tibet, south to the Indo-Gangetic plains, east toward the Brahmaputra delta of Bangladesh and west toward the historical city of Lahore in Pakistan. As night fell, thousands of scared residents continued to camp out in parks and compounds, too scared to return to their homes.
3 Age of the wrinkle-free man (Sushmita Bose in Khaleej Times) I got a mail the other day from someone trying to suggest a story idea on Brotox. That’s the male equivalent of Botox. After bromance, Brotox, apparently, is the next big thing in the new-age male sector. More and more men want to look younger; they want wrinkle-free, taut faces — in order to be taken seriously professionally and to be a hit with the fairer sex.
I found this slightly odd because, traditionally, men have always been taken seriously when they had salt and pepper in their hair (and not because of premature graying). So, it saddened me that maybe it’s time to say goodbye to that appealing image of the George Clooney prototype.
As I was looking for some pointers on the psychology of the loss of youth, I came across some interesting figures. In a survey conducted — among women — in the UK, 41 per cent wished they looked younger (I was actually surprised to see that; I somehow believe that figure would be higher). About 20 per cent worry about their age every day (wow!). The age when women are most worried “about how old they look” is 39.5 (I’m pretty sure, pre-third millennium, the magic number would have been 29.5). Over 55s are least worried about how old they look. And, in a reverse flip, about a quarter of under-24s feel they look older than they are actually are.
Eternal youth coupled with immortality would obviously be an ideal scenario for dream catchers. But in real life, if (suddenly) it ever were a toss-up between life-long youth and immortality, it’ll perhaps be a thumping victory for the former. Youth. A transience that’s supposed to embody “the freshness of the deep springs of life”.
The selling point of stuff like Botox (or Brotox) and anti-ageing products is a hint of promise for the extension of this transience. Women have, for long, fretted about ‘losing youth’; men have been far more deadpan… but it was just going to be a matter of time before they too fell in line at the counter of youth-sell.
Thursday, April 23, 2015
The $18bn arms race in the Middle East; China economy puts pressure on its lopsided job market; Libya chaos rocks Europe's boat
1 The $18bn arms race in the Middle East (Peter Beaumont in The Guardian) The Middle East is plunging deeper into an arms race, with an estimated $18bn expected to be spent on weapons this year, a development that experts warn is fuelling serious tension and conflict in the region.
Given the unprecedented levels of weapons sales by the west (including the US, Canada and the UK) to the mainly Sunni Gulf states, Vladimir Putin’s decision last week to allow the controversial delivery of S-300 anti-aircraft missiles to Iran – voluntarily blocked by Russia since 2010 – seems likely to further accelerate the proliferation.
That will see agreed arms sales to the top five purchasers in the region - Saudi Arabia, the United Arab Emirates, Algeria, Egypt and Iraq – surge this year to more than $18bn, up from $12bn last year. Among the systems being purchased are jet fighters, missiles, armoured vehicles, drones and helicopters. The Russian declaration came only two days before Iraq’s prime minister, Haider al-Abadi, disclosed he was seeking arms worth billions of dollars from Washington – with payment deferred – for the battle against Islamic State (Isis).
Ironically, among the key weapons suppliers in the arms race are permanent members of the UN security council who have been at the centre of two unconventional arms control initiatives – disarming the Syrian government’s stockpiles of chemical weapons and negotiating for a deal on Iran’s nuclear programme.
2. China economy puts pressure on its lopsided job market (Neil Gough in The New York Times) China has a job market mismatch. Agriculture jobs have been declining for years, the result of urbanization and the country’s continuing economic transformation. And China’s huge manufacturing sector is showing new signs of stress, as some companies struggle with rising debt and rampant overcapacity.
China’s services business, which includes industries like logistics, retail, information technology and sanitation, is booming, driving job creation across the entire economy. Around 300 million people now work in services in China, accounting for nearly 40 percent of the world’s largest work force.
But workers are not easily making the switch. Unskilled or semiskilled workers can be a bit choosier now as growth of the pool of migrant workers slows. At the same time, soaring university enrolment means new graduates often struggle to find the high-paying white-collar jobs they were expecting. The job market — and its lopsided pockets of supply and demand — presents a critical test for policy makers. For more than a decade, China’s urban work force swelled and incomes rose in the double digits, matching or exceeding the heady economic growth rates in those years.
Now, the nation’s economic outlook is slowing. Gross domestic product rose 7 percent in the first quarter, which represents the slowest quarterly growth since early 2009. “We’re in this weird position where the Communist Party leadership seems completely comfortable with the idea that every year GDP growth, wage growth — everything in the economy — is going to be growing a little bit more slowly,” said Andy Rothman, an investment strategist at Matthews Asia in San Francisco.
China’s premier, Li Keqiang, recently sought to play down the importance of the GDP growth target, saying instead that he preferred to focus on whether the economy was expanding in a way that created new jobs. And so far, it appears to be doing that. China added 13.2 million new urban jobs last year, surpassing Mr. Li’s official target of 10 million such jobs.
The realities of the market have set in. At nearly seven million a year, China today produces twice as many university graduates as it did 10 years ago. The supply appears to be outpacing the demand from prospective employers. China’s new graduates have traditionally shied away from working in factories, seeing this as a sign of lower status. But, perhaps because of the slowdown, there are signs this is changing.
3 Libya chaos rocks Europe’s boat (Dan Murphy in Khaleej Times/Christian Science Monitor) Libya's chaos has once more made it a major way station for Africans seeking a better life, as the European Union grapples with the morality of cutting back on patrols to rescue migrants. The argument for doing less is that increasing the risk of crossing the Mediterranean would save lives. Word that there was no safety net would filter back to people, many of them fleeing persecution, and they’d stop coming.
Last year, a record 170,000 refugees flooded across the Mediterranean, traveling in large part out of Libya and arriving in Italy. In January, more than 3,500 refugees and migrants reached Italy from Libya, a 60 percent increase from January 2014. They come from all over Africa and the Middle East.
The Eritreans are fleeing a brutal regime which dragoons young men into military conscription and maintains a semi-permanent war footing with neighbouring Ethiopia. Syrians and Iraqis are fleeing the war and atrocities committed by the Daesh, Palestinians the open prison that is Gaza, and West Africans the crushing poverty that has framed many of their lives ... The vast majority of refugees make for Libya, where a power vacuum since the 2011 fall of dictator Muammar Gaddafi has enabled gangs of human traffickers to flourish ...
The migration crisis in its current iteration stems, in part, from the fall of Libya’s Muammar Gaddafi. In 2010, Europe was moving quickly to normalise relations with the former dictator. Oil interests played a role, but so did the desire of many European nations to outsource migrant control to the North African country.
Libya’s coast has a long history of sending people – willing and unwilling – to Europe and the Americas. Ports like Tripoli and Benghazi were the final stops for medieval slave-trading caravans from the African interior until the 19th century. In recent decades, migrants have shoved off for Italy and Spain in rickety fishing boats, with Libyan officials looking the other way.
When the uprising against Gaddafi began in early 2011, the situation only grew worse for the African migrants. Many rebel groups were convinced that any foreign African in the country were mercenaries for Gaddafi and hundreds were executed. In the years since, Libya’s lawlessness has made traveling through the country even more dangerous and unpredictable. The videotaped mass execution of Ethiopian and Eritrean migrants carried out by Daesh makes that clear enough. Yet still people go, and the UN refugee agency is now calling the recent shipwreck the deadliest it has ever recorded.
Tuesday, April 21, 2015
Russia economy shrinks 2%; Army deployed to tackle South Africa xenophobic violence; Eritrea, North Korea are most censored states
1 Russia economy shrinks 2% (BBC) Russian Prime Minister Dmitry Medvedev said Russia's economy shrank by 2% in the first three months of this year, the first contraction since 2009. He attributed the shrinkage to the pressure of sanctions and the weak oil price. But, addressing MPs, he said the economic situation was not as bad as in 2009 and was stabilising.
He said Russia faced "a new reality" and that the heaviest pressure had come from "the main political decision last year - the return of Crimea to Russia". Western sanctions were imposed after Russia annexed Ukraine's Crimea region in March 2014, and they have been escalated during the fighting in eastern Ukraine, where Moscow is backing separatist forces.
He compared the significance to Russia of the return of Crimea to "the reunification of Germany or the return to China of Hong Kong and Macao". He estimated that losses as a result of sanctions had dented income from some foreign exports by €25bn (£18bn; $26.7bn), 1.5% of gross domestic product, a figure he said could "increase several times" this year.
The country's central bank has predicted the economy could shrink by up to 4% this year if oil stays at about $50 a barrel. But Mr Medvedev said Russia could cope, even if economic conditions deteriorated further: "If external pressure intensifies, and oil prices remain at an extremely low level for a long time, we will have to develop in a new economic reality”, he said.
2 Army deployed to tackle South Africa xenophobic violence (David Smith in The Guardian) The South African government has deployed the army to volatile hotspots in Johannesburg and Durban after a wave of xenophobic violence killed at least seven people, displaced more than 5,000 and plunged the country into a diplomatic crisis.
Officials described military intervention as a last resort that would act as a deterrent, but an opposition party described it as an over-reaction reminiscent of the racist apartheid regime. One of the areas in question is Johannesburg’s Alexandra township. On Saturday a Mozambican man, Emmanuel Sithole, was stabbed to death in the township in broad daylight and on Monday night a Zimbabwean husband and wife were both shot in their necks but survived.
By Tuesday the mood was generally calm. The xenophobic outbreak is the worst since 2008, when 62 people were killed in Alexandra and other Johannesburg townships. The army was deployed to restore order on that occasion, and has also been used against striking workers in 2012 and last year.
Zulu king Goodwill Zwelithini has denied triggering the wave of xenophobia in a speech last month when he called for foreign nationals to leave. Regional relations have been strained, with Zimbabwe, Malawi and Mozambique organising for some citizens to return home.
3 Eritrea, North Korea are most censored states (San Francisco Chronicle) The small African nation of Eritrea tops even North Korea in its restrictions on the media, a new global report says. The New York-based Committee to Protect Journalists has issued its annual list of the world's top 10 most censored countries.
Here's the rest of the list: Saudi Arabia, Ethiopia, Azerbaijan, Vietnam, Iran, China, Myanmar and Cuba. How nations restrict Internet access is an important factor in the report. Eritrea allows only dial-up access, and North Korea allows Internet access to a small number of elite. And Eritrea has the world's smallest percentage of citizens with mobile phones, at 5 percent.
The report says 44 journalists are imprisoned in China, more than any other country. That's the highest number since the journalism group started keeping track a quarter-century ago.
The report also takes note of "four heavily censored nations that nearly made the list:" Belarus, Equatorial Guinea, Uzbekistan and Turkmenistan. It says each country has little or no independent media.
Monday, April 20, 2015
China's superhighway to Pakistan; 'Waves of millions of Africans' likely to flood Europe; Whatsapp@800 million
1 China’s superhighway to Pakistan (BBC) China's President Xi Jinping has signed agreements with Pakistan promising investment of $46bn. The focus of spending is on building a China-Pakistan Economic Corridor (CPEC) - a network of roads, railway and pipelines between the long-time allies.
They will run some 3,000km (1,800 miles) from Gwadar in Pakistan to China's western Xinjiang region. The projects will give China direct access to the Indian Ocean and beyond. This marks a major advance in China's plans to boost its influence in Central and South Asia, and far exceeds US spending in Pakistan.
Pakistan, for its part, hopes the investment will strengthen its struggling economy and help end chronic power shortages. Pakistani Prime Minister Nawaz Sharif said ties with China had "remained robust" despite political changes and "major regional developments" over four generations.
2 ‘Waves of millions of Africans’ likely to flood Europe (Rowena Mason in The Guardian) Nigel Farage has warned against “waves of millions” of people from Africa coming to Europe if the EU agrees a common policy for tackling migrant deaths in the Mediterranean. In the wake of two boat disasters in which hundreds of migrants have drowned, the Ukip leader said he opposed EU action to address the problem as it could lead to a common migration policy.
The UK government has until now resisted EU search and rescue efforts but David Cameron signalled this week that he will be in favour of the UK joining joint action when he attends a meeting of leaders on Thursday. But Farage said he thought the UK could send in the Royal Navy but should have no part in the EU-wide efforts.
Farage said: “I’m happy to send the Royal Navy, I’m happy to stop people drowning in the Mediterranean. But it needs the cooperation of the Italian and Greek governments to say we cannot accept an unlimited number of people crossing over. If that message is not sent, many millions of people will come.” Farage said he could not be “accused of being closed-minded” as he had been in favour of accepting some Christian refugees from Syria.
Pressed on why he only thought Christian refugees should be accepted, the Ukip leader said it was because they have nowhere else to go. Asked about where Britain should draw the line when it comes to accepting refugees and saving lives, he said: “I’ve already said I’m prepared to accept some people that have literally nowhere to go but beyond that, I’m sorry we cannot have yet another unlimited wave coming into Britain.”
3 Whatsapp@800m users (Chew Hui Min in Straits Times) Mobile messaging service Whatsapp now has 800 million monthly active users, CEO Jan Koum has revealed in a Facebook post.
The app had about 600 million users when Facebook acquired it last year, and it announced that it had reached 700 million users in January this year. At this rate of expansion, it will reach a billion users by the end of the year, the Wall Street Journal predicted.
In a dig at other messaging services, which often report registered users only, Mr Koum added: "Reminder for the press out there: active and registered users are not the same thing." Facebook messenger is second to Whatsapp with about 600 million monthly active users, making the company the owner of the two largest messaging services in the world.
Sunday, April 19, 2015
Arab youth joblessness at 30%; Mediterranean as a sea of sorrows for migrants; When idle hands destroy in South Africa
1 Arab youth joblessness at 30% (Dawn) “The unemployment rate among Arab youth until the age of 30 years exceeds 30 per cent,” the director general of the Arab Labour Organisation Ahmad Mohammed Luqman said. “Unrest and a lack of investments have boosted the number of jobless”. He said many graduates fail to find employment because their specialisations are not needed by private sector.
“Due to unrest in several Arab nations, the number of Arabs without jobs has jumped two million since 2011, making the total number of unemployed Arabs at 20 million,” Luqman said.
He said unemployment in the Arab world hit 17pc last year, “three times higher than the global average,” adding that it appeared that jobless numbers will rise this year and the next.
2 Mediterranean is sea of sorrows for migrants (San Francisco Chronicle) Migrants seeking a better life in Europe have died by the thousands in the Mediterranean Sea in recent years while fleeing poverty and bloodshed in Africa, the Middle East and Asia.
The ill-documented toll rose again Sunday as rescuers searched for an estimated 700 passengers from a capsized boat north of Libya. Authorities count only those bodies found in the sea, on shore, or aboard boats where migrants can die of thirst or exposure. Survivors often tell of fellow passengers who lost their lives at sea, but the bodies are never found.
Here is a list of the deadliest migrant boat events, based on bodies recovered or survivor accounts: Christmas 1996: 300 believed drowned in the waters between Malta and Sicily. June 20, 2003: 50 corpses found, 160 migrants missing, 41 survivors in a shipwreck off Tunisia. May 6, 2011: Boat carrying more than 600 migrants is shipwrecked off Libyan coast. Hundreds reported missing. June 2, 2011: At least 270 missing from boat with 700 aboard sinks off Tunisian coast.
Oct. 3, 2013: 366 people die, 155 survive after shipwreck off Lampedusa. Sept. 10, 2014: Some 500 Syrians, Palestinians, Egyptians and Sudanese drown after their boat is rammed by another boat of human traffickers off Malta. Sept. 14, 2014: Libyan navy reports 26 rescued from a boat carrying 250 migrants off Libyan coast. About 200 missing and presumed dead.
Feb. 8-9, 2015: At least 29 die and 300 people reported missing after four boats become waterlogged in the frigid sea after leaving Libya. April 12, 2015: Nine confirmed dead after boat capsizes off Libya. Some of the 144 survivors tell aid workers that about 400 aboard drowned.
3 When idle hands destroy in South Africa (Johannesburg Times) Oliver Tambo once said: "A nation that does not cater for its youth is doomed for failure." And so it is with our country.
This week's xenophobic attacks in KwaZulu-Natal and parts of Gauteng have substantiated what Tambo asserted decades ago. It is evident that the youth are not catered for in the post-apartheid South Africa.
The high rate of unemployment and the severe skills shortage means the youth are vulnerable and easily led astray. It is unfortunate that they direct their anger at the wrong people and loot the shops of foreigners.
It is equally devastating to realise that there is no political will to change the status quo. It is vital to address unemployment and the dissatisfaction it causes before that anger explodes with even greater violence.