Saturday, October 15, 2016

Global liquidity to stay abundant; To do an MBA or not; Anger of India's Marathas

1 Global liquidity to stay abundant (Khaleej Times) Despite US Fed hikes, global liquidity will remain extremely abundant due to monetary easing by other central banks (ECB, BoE, BoJ, China), according to Euler Hermes, the worldwide leader in trade credit insurance.

In its updated risk analysis for Q3 2016, the company notes, however, that global growth should reach its lowest level in 2016 2.4 per cent and will in 2017 be below three per cent for the seventh consecutive year, driven up by the US and emerging markets.

"Global liquidity should remain abundant due to further monetary easing by major central banks, despite the US Fed hikes," said Ludovic Subran, chief economist at Euler Hermes. "However, low rates and monetary policies are far from uniform, so liquidity can move rapidly across the regions, generating volatility and turbulences."

Euler Hermes identified various alerts coming from the regional tectonic plates: The US economy should benefit from resilient consumption due to increasing confidence and private investment. The stronger economic activity will alleviate the downward pressures on main suppliers of the industrial sector. The expected Fed hikes have limited impact on emerging market currencies.

Fine-tuned macro policies in China are aimed at supporting growth, expected at +6.5 per cent in 2016 and +6.4 per cent in 2017. There will, however, be lower demand for foreign goods, negative price pressures and financial stress.

In Europe, growth is expected to remain stable at +1.6 per cent due to a better policy mix. The ECB's Quantative Easing (QE) programme is Europe's biggest safety belt and has doubled to 630 billion euros. The region is characterised by multiple political uncertainties including Brexit, upcoming elections and several points of tension.

Emerging markets will face various situations. Expected growth of +3.8 per cent in 2016 and +4.4 per cent in 2017 will, respectively, contribute to 1.5pp and 1.7pp of global growth. While Brazil and Russia should exit recession, the credit crunch and exchange rate crisis impact several other countries such as Mexico, Nigeria, Turkey or Venezuela.

2 To do an MBA or not (Lee Xin En in Straits Times) Amid the gloom of an economic downturn, the prospect of a challenging job market and the Government's exhortations to upgrade our skills, many are looking into the next step to propel their career forward.

One option that seems to promise bigger salaries and a higher rung on the management ladder is to enrol in a top business school for a Master of Business Administration. Many senior and successful people felt that learning on the job was more important. Several pointed out that MBA graduates still had to be taught managerial skills and had to be treated like most new employees.

But in my interviews with MBA graduates, many felt they could not have learnt as much and as quickly about so many different industries in this way. At an information session at Insead last week, I was struck by the soft skills, such as negotiation, that can be learnt in an MBA class through real-life situations.

The other criticism of the MBA, which is often voiced more vociferously, is its cost. This year, Insead's 10-month MBA costs €73,500 for tuition. That does not include accommodation and living expenses. The top American MBA programmes, which typically take two years to complete, cost about $70,000 for tuition.

For those interested in joining start-ups or looking for a partner to start one, business school seems like a good place to begin. What most savvy investors talk about when they discuss a good investment is often related to their relationships and personal development.

In my opinion, an MBA is a good investment if you are genuinely interested in business-related topics - the better if the MBA's focus is specific and you want to find people with whom you can develop in tandem, with common career and industry interests.

3 Anger of India’s Marathas (The Guardian) Over the past two months, at least a dozen cities in the western Indian state of Maharashtra have exploded in an unprecedented outburst of popular uprising from the Maratha community, made up of the landowning farmer castes. The Marathas comprise a third of Maharashtra’s 114 million population.

The silent protests began in July after the gang rape and murder of a 15-year-old Maratha girl in the village of Kopardi, allegedly by “untouchable” Dalit men. The incident stirred up anger in the Maratha community, who argued that the police and media were neglecting the case in the interests of political correctness.

In India, for generations, low-caste Dalit people were considered “dirty” in the Hindu caste system. After independence in 1947, caste was formally abolished, but continued to be one of the most important identity markers, especially in rural India.

Maratha activists argue that if the girl had been Dalit, and her alleged rapists and killers had been high-caste men, the narrative would be far more appealing to politicians and journalists, who want to be seen as champions of the underdog Dalit community. Discrimination, they say, has now swung in the opposite direction: Dalits enjoy the benefits of affirmative action in jobs and universities, while farmers face neglect from successive governments.

The Marathas are so neglected that when the first march happened, in the city of Aurangabad, none of the major local newspaper or television outlets bothered to turn up, says Bhaiya Patil, a 28-year-old activist who has become the social media manager of the movement.

“There were 500,000 people in the street and no one was interested. There was no footage, no cameras, no coverage. That’s why we turned to social media. We started posting our own pictures and video and suddenly everyone started listening. It gave us our voice.”

The marches are silent, but their demands are loud and clear. The movement brings together the economic and social grievances of millions of people across Maharashtra. They want reforms in the Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, which they argue is unfairly used against higher-caste communities.

They want to be included in the list of “other backward castes”, which gives welfare benefits to listed castes and which politicians change every election season to win votes. The Marathas also want loan repayments cancelled and a fund for drought-hit farmers.

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