IMF sees US economy picking up; Egyptians' quarter-life crisis; Gold smuggling takes off in India

1 IMF sees US economy picking up (BBC) The underlying condition of the US economy is improving, according to the International Monetary Fund (IMF). However, the IMF added that the recovery from recession has so far been "tepid". In its regular assessment of the economy, the IMF said the US still faces "powerful headwinds". But it noted gains on stock markets and in house prices, and predicted that economic growth should gradually accelerate over the next year.

The IMF said the expiration of the payroll tax cut earlier this year and the impact of government spending cuts (through the so-called sequester) were "weighing significantly on growth this year". However, further ahead, the IMF sees a slightly brighter picture and expects "economic activity to accelerate to 2.7% next year as the fiscal drag subsides and the negative legacies of the financial crisis wane further".

Overall, the IMF felt that the improvement in the underlying conditions of the US economy "bodes well for a gradual acceleration of growth". The IMF's assessment is in stark contrast to one it released early this week on the eurozone, in which it concluded that the economies in several member countries remained weak.

2 Egyptians’ quarter-life crisis (Maria Golia in The New York Times) Youth is at the forefront of Egypt’s political movement because it has the most at stake. Among all the citizens of this overpopulated, chronically mismanaged desert country, they also have the hardest work ahead: They are inheriting limited land and water resources, environmental devastation born of unregulated development and inadequate housing owed to decades of clumsy or corrupt policies.

Considering that half of the 20 million Egyptians aged 18 to 29 live in poverty and 77% of those between 15 and 29 years old are unemployed, Egypt is remarkably peaceful these days. I wonder if New York or any other big American city could survive for over two and a half years amid such political uncertainty without a functioning police force.

The relative calm is the result of entrenched traditions respecting authority and favoring order, however tenuous, over chaos. Parents here command respect without having to threaten withholding allowances or privileges. Questioning authority in this culture can mean losing your job or worse. Yet obedience and conformism — which are reinforced in schools, mosques and churches, and the workplace — have paralyzed both individual initiative and teamwork. Consensual decision making comes hard to people accustomed to either giving or taking orders.

Whether they stand firmly for or against Morsi and the Muslim Brotherhood, Egypt’s youth have much in common. They, like the rest of their beleaguered fellow citizens, all want good governance, stability and prosperity. Their real battle is not with one another but with the outdated “my way or the highway” thinking they inherited from their authoritarian elders.

3 Gold smuggling takes off in India (Biman Mukherji & Arpan Mukherjee in The Wall Street Journal) India, the world's largest gold consumer, meets almost all of its demand via imports. And purchases from abroad require buyers here to sell the rupee to raise greenbacks. Curbing imports is meant to limit that downward pressure on the currency.

The country sharply increased the import tax on gold to 8% from 6% in June, the fourth such increase in the last year and a half. In December 2011, the import tax on gold was set as a flat rate that amounted to about 1%. Last month, the government also made it harder for dealers to use bank credit to buy the precious metal from suppliers overseas. The nation's central bank restricted banks and trading agencies from importing gold on behalf of customers and taking payment later.

The measures are having an effect. Gold imports declined 11% to 859.7 tons in 2012 from 969 tons in 2011. And the total for June fell about 80% to 30 tons from 162 tons in May, according to a trade ministry official. But while supply may be falling, demand isn't.

Traders and tax officials say the import decline presents opportunities for smugglers. "Smuggling of gold seems to be increasing month on month," said a senior official in the Department of Revenue Intelligence, a part of the Finance Ministry that combats tax evasion. "It is mostly coming from Dubai but also from Bangkok and Singapore." The official said some of the gold comes by sea, but it also is being smuggled across land borders with Bangladesh and Nepal.

The number of people arrested by the department for gold smuggling rose to 32 in the quarter that ended in June from four during the same period a year earlier, according to the Revenue Intelligence official. The value of the gold seized during the quarter was 270 million rupees, more than 10 times the 25 million rupees of precious metal retrieved from smugglers during the same period in 2012, said the official.