1 Worst monthly fall for FTSE 100 since 2012 (David
Hellier & Katie Allen in The Guardian) Chill economic winds from China have
left the FTSE 100 nursing its worst monthly losses since May 2012 after a week
that saw global stock markets shaken by concerns over the world’s second
largest economy. London’s leading share index lost 6.7% during August while the
pan-European FTSEurofirst 300 shed 10% over the same period.
That reflected growing concerns about the outlook
for the global economy, as the world’s growth engine, China, appeared to lose
steam. Investors in commodities, shares and emerging market currencies have
taken fright over the past month as moves by the Chinese authorities hinted at
the true extent of their worries about slowing growth.
Among Beijing’s actions, the biggest shock came from
a dramatic devaluation of the yuan in an apparent attempt to shore up flagging
exports. The turmoil carried a silver lining for investors, as it prompted markets
to push back expectations of when interest rates in the US and the UK might
finally start to rise after years at record lows.
It has also prompted policymakers at the Federal
Reserve, the US central bank, to indicate that a looming interest rate rise
might not go ahead as soon as expected. Indications that a rate increase would
be delayed in the US helped calm investors unnerved by the prospect of an imminent
tightening in credit costs in the world’s largest economy.
Global oil markets have fallen by a third since May
and are still well under half their value a year ago, thanks to a huge
oversupply of fuel and sluggish demand. Worries about China’s economy have
compounded the falls in recent weeks. But analysts said oil markets fell too
far, too fast and a rebound was on the cards.
http://www.theguardian.com/business/2015/aug/28/share-prices-close-week-black-monday-china-oil-price
2 Africa uneasy as China turmoil pricks investment
boom (Stephanie Findlay in Johannesburg Times) When Chinese company Shanghai
Zendai bought 4,000 acres of land outside Johannesburg in 2013, it promised to build
the "New York of Africa." The sleepy district of Modderfontein would
be transformed into a $7.8 billion metropolis with a forest of skyscrapers,
35,000 houses and a sanctuary of green space to rival Central Park.
The planned city became a symbol of China's
seemingly limitless ambition across the African continent. But as global alarm bells
ring over China's slowing economic growth, future projects on the vast scale of
Modderfontein could be under threat.
For the past decade, China gobbled up much of the
commodities that Africa produces, overtaking the US in 2009 to became the
continent's single largest trading partner. Surging commodity prices helped the
sub-Saharan Africa region grow at over four percent annually for two decades. Beijing
even built the $200 million African Union headquarters in the Ethiopian capital
Addis Ababa in 2012 as a gift expressing "friendship to the African
people."
However, the rapid pace of investment could be at
risk as China grapples with weak demand for its goods and a schizophrenic stock
market. Many experts now question the sturdiness of China's growth and warn of
the inevitable damage to those countries who rely on it.
"The first impact is on commodity prices, which
directly influences Africa. The second is investment, which will obviously slow
down," said Celeste Fauconnier, Africa analyst at Rand Merchant Bank. Already,
countries are reeling from the Chinese turmoil, with commodity prices falling
to a 16-year low.
To keep growing, African economies have to wean
themselves off commodities, analysts say. Despite the worries, economists say
predictions that China will no longer be a major player in Africa are
overblown. Instead, China's activities in Africa are set for a wholesale review
to take into account the new global economic outlook.
http://www.timeslive.co.za/local/2015/08/28/Africa-uneasy-as-China-turmoil-threatens-investment-boom
3 Why India needs new debate on caste quotas (Shashi
Tharoor on BBC) India has been shaken, and its thriving state of Gujarat
paralysed, by a massive agitation by its influential Patel community. Millions
gathered in the state's major towns under the surprisingly belligerent
leadership of a hitherto unknown 22-year-old called Hardik Patel, clamouring
for their caste to be granted affirmative-action benefits known as
"reservations".
The agitation damaged not only property and people
but also some of the fundamental assumptions of Indian politics. India's
constitution, adopted in 1950, inaugurated the world's oldest and
farthest-reaching affirmative action programme, guaranteeing scheduled castes
and tribes - the most disadvantaged groups in Hinduism's hierarchy - not only
equality of opportunity but guaranteed outcomes, with reserved places in
educational institutions, government jobs and even seats in parliament and the
state assemblies.
As more and more people sought fewer available
government and university positions, we witnessed the unedifying (and
unwittingly hilarious) spectacle of castes fighting with each other to be
declared backward. As an uncle of mine sagely observed, "In our country
now, you can't go forward unless you're a backward."
India's first prime minister Jawaharlal Nehru had
hoped that caste consciousness would wither away after Independence, but the
opposite has happened. The number benefiting from such sops varies from state
to state, but has reached extreme proportions in a state like Tamil Nadu, where
69% of government jobs and educational positions are reserved for a range of
deprived and disadvantaged castes.
Some argue for reservations to no longer be
caste-based but tied only to economic criteria, with the poorest of all castes
benefiting from them rather than the better-off of some castes. Gujarat's Patel
agitation has succeeded in starting a nationwide debate on reservations. It has
an interesting partner in India's Supreme Court, which earlier this year struck
down the government's notification including the powerful Jat caste in the list
of OBCs.
"The gates would be opened only to permit entry
of the most distressed. Any other inclusions would be a serious abdication of
the constitutional duty of the State," the court warned. This suggests
that the Patel's demands to be classified as OBCs will not stand the scrutiny
of the Supreme Court. But it also suggests that India's entire range of
affirmative action practices will need to be reviewed. The battle has truly
been joined.
No comments:
Post a Comment