More stimulus can 'harm stability'; Brazil's middle class backlash; Snowden: America's most wanted man; India's hunger games

1 More stimulus can ‘harm stability’ (Heather Stewart in The Guardian) Central banks have done as much as they safely can to rebuild the world economy, and the onus is now on politicians to create the conditions for a stronger recovery, according to the Bank for International Settlements, the central bankers' club.

In its annual report the bank, based in Basle, Switzerland, warns that with unprecedented stimulus already in place, fresh action from central banks to kick-start growth may do more harm than good, by distorting financial markets and jeopardising stability. "Unfortunately, central banks cannot do more without compounding the risks they have already created. Monetary stimulus alone cannot put economies on a path to robust, self-sustaining growth, because the roots of the problem preventing such growth are not monetary," said Stephen Cecchetti, head of the bank's monetary and economic department, presenting the report.

The bank's intervention comes at a critical time, as the Federal Reserve is preparing the US public for the end of the quantitative easing programme under which it bought $85bn of bonds every month. In total, central banks in the world's major economies, including the US, UK and Japan, now own assets worth 25% of those countries' GDP.

The regulating bank in Basle believes it is the right time for central banks to reconsider their role. "We are past the height of the crisis, and the goal of policy has changed – to return still sluggish economies to strong and sustainable growth. Can central banks now really do 'whatever it takes' to achieve that goal? As each day goes by, it seems less and less likely."

2 Brazil’s middle class backlash (Donna Bowater in The Telegraph) More than half of Brazil’s 190million population are now deemed middle class, with many of them travelling abroad for the first time for work and for holidays. But the very improvements that have broadened their horizons have also made them realise that Brazil still has a long way to go - be it in fixing its terrible public services, combating soaring inflation, or doing more for the vast numbers of people still living in favelas, the crime-ridden shanty towns that spread across the hillsides of cities such as Rio.

Indeed, at 36% of GDP, Brazilians have one of the highest tax rates in the developing world. But public services are often dismal and the financially squeezed middle class are frustrated by the low standards in education and healthcare. Private schools, which are considered the only option for ambitious for their children, can be two years ahead in the curriculum compared to their public-sector counterparts. In Brazil's hospitals, patients sometimes lack beds and, last year, rats and cockroaches were found in the kitchen of a state clinic in Sao Paulo that treats lepers.

Adding to the pressure on taxpayers' wallets has been rising inflation, caused partly, say critics, by the growth-led policies that president Dilma Rousseff has introduced to fend off the effects of the global recession. The government has already spent three times what South Africa spent in 2012 on preparations for next year's Soccer World Cup.

Rousseff has vowed to improve health, education and citizens' rights. The package of measures she offered included a new national plan for public transport in cities, more doctors, more spending on schools, and a crackdown on corruption. But some observers expect people to continue to show up on the streets.

3 Snowden: America’s most wanted man (Khaleej Times) He is cognizant of the quandary WikiLeaks founder Julian Assange is currently in, so why did whistleblower Edward Snowden decide to reveal his identity? Perhaps, Snowden preempted his ultimate fate by coming out in the open. The 29-year-old probably knew that after divulging that the US authorities would have sooner or later caught him. By revealing his identity, he has at least been able to garner public sympathy worldwide and has improved his chances of getting political asylum in some country.

But things won’t be easy for the renegade American. Even though he has his coterie of sympathizers, Snowden is a wanted man and he might just have to live as a fugitive in the years to come.

But even though Washington might be able to get hold of him and subsequently convict him, the damage has already been done. Snowden’s shocking revelations have sparked a hot debate about the invasion of privacy. The National Security Agency, in the following weeks, will have to come up with a very smart public relations campaign to salvage its image.

4 New Delhi’s hunger games (Sadanand Dhume in The Wall Street Journal) With economic growth in the doldrums, the rupee hovering near a historic low and business confidence at rock bottom, you would think the Indian government has better things to do than roll out yet another controversial new subsidy. Think again. If the government has its way, it will go into next year's elections having passed a gargantuan food security law whose costs—economic, environmental and moral—will have to be paid down by future generations.

The new law will provide five kilograms of highly subsidized rice, wheat and other grains to two-thirds of India's population, or about 800 million people. The grains will be priced at between one and three rupees (2 to 5 cents) per kilogram, up to 90% below prevailing market prices. A giant state-owned company, the Food Corporation of India, will distribute them through a vast nationwide network of so-called "ration shops."

The food security law betrays the same false assumptions as the rest of an elaborate "rights" framework the government has erected over the past decade: that India's poor must be counted expansively rather than carefully, that they're looking for a handout rather than a hand up, and that government outlays matter more than outcomes. To start with, it's unaffordable. The government claims the program will cost about $22 billion a year, or $4.5 billion more than an existing food subsidy program that covers 325 million people. But the Commission for Agricultural Costs and Prices, itself a government body, says the real cost may be high as $42 billion per year.

Meanwhile, Finance Minister Palaniappan Chidambaram is telling foreign business and government leaders that Delhi is serious about reining in its fiscal deficit (budgeted at 5.2% of GDP in the fiscal year ended March 31). It's hard to see how he can square that assertion with such a large new entitlement. Even if India could afford such spending, the program would still be illogical. Simply put, hunger is yesterday's battle.

Thanks to rising incomes spurred by economic reforms begun in 1991, by 2005 the proportion of hungry Indians had fallen to 2%, or about 25 million people. So why doesn't government target aid at the truly needy who appear unable to help themselves, rather than spreading largesse to two-thirds of the population? Why, then, has the government come up with such a harebrained idea? Quite simply, because India has failed to learn the lessons from its failed socialist past. Populist politicians enhance both their electoral prospects and their bank balances by hatching do-gooder schemes that leak like a sieve.