Eurozone growth gathers speed; End of the automobile era?; Korea's lesson for Japan; New Delhi's chief minister who cried 'Wolf, wolf'

1 Eurozone growth gathers speed (BBC) The eurozone's economy grew by 0.3% in the final three months of 2013, up from 0.1% growth in the previous quarter. It was the third quarter of growth since the end of an 18-month recession, the longest period of contraction to affect the single currency area. The eurozone figures include 17 of the EU's economies. Latvia became the currency zone's 18th member in January. 

Across the whole 28-nation EU, including the UK, growth for the October-to-December period was 0.4%. The figures from Eurostat, the EU's statistics office, also showed that during 2013, GDP contracted by 0.4% in the eurozone, but increased by 0.1% in the EU as a whole.

According to preliminary figures, Germany's economy grew by 1.3% in 2013, the statistics office said. In general, the German figures were better than analysts had been expecting. Italy's official statistics office also issued figures showing that its economy returned to growth after a two-year recession.

http://www.bbc.co.uk/news/business-26185159

2 End of the automobile era? (Khaleej Times) Auto sales have been falling significantly in the US and many countries in Europe in recent years. China (the world’s largest car market) and India (one of the fastest growing car markets) were to have revived the fortunes of the industry. But car sales in India in 2013 slumped by nearly 10 per cent, the first time the industry recorded negative growth in 11 years. In China, the authorities in several cities including Beijing, the capital, have imposed severe restrictions on car sales to curb rising pollution. The demand for cars has slackened in India mainly because of the high interest rates, which discourages people from buying a vehicle.

But in the developed world, there is growing consumer resistance to the acquisition of new cars, not as part of a ‘green’ movement, but mainly because of the economic crisis. A recent report by the University of Michigan’s Transportation Institute notes that 9.2 per cent of American households do not own a car now, as against 8.7 per cent in 2007. 

Worryingly for the industry, the young are increasingly choosing not to buy a car. A study in the US found that there has been a 30 per cent decline in the sale of cars between 2007 and 2011 to those in the 18-to-34 age group. IHS Automotive, a leading international consultancy, in a report — Is car ownership a thing of the past? — warns that trends in urban motorisation could reduce the number of motor vehicles in use globally in 2035 by 250 million from the current level of one billion.

http://khaleejtimes.com/kt-article-display-1.asp?xfile=/data/editorial/2014/February/editorial_February30.xml&section=editorial

3 Korea's lesson for Japan (The Wall Street Journal) Amid the recent emerging-market turmoil, a stable exception has been South Korea. The Bank of Korea's decision to hold interest rates steady raised nary an eyebrow among investors, and there's a lesson here for Japanese Prime Minister Shinzo Abe. Korea has maintained its economic resilience even as the Korean won has appreciated by 9% against the dollar since early 2012. This belies a central plank of Mr. Abe's agenda for Japan—that currency devaluation is critical for export competitiveness. Korean companies have held their own against their Japanese competitors over the past year despite Mr. Abe's dramatic weakening of the yen.

Among other reasons, Korean companies have competed globally by improving quality. Note that Apple's leading challenger is Samsung, not a Japanese company. Mr. Abe could also mark the ways Korea benefits from a free-trade push Seoul started several years ago. Trade agreements with the European Union and the US are now in effect, opening formerly sheltered domestic industries to competition and investment.

Seoul has been quicker and more eager than Tokyo to embrace free trade; more willing to tolerate a stronger currency; and more committed to domestic reforms, especially in paring back old industrial policies and cutting red tape on services. Mr. Abe has signed Japan up for the multilateral Pacific trade talks. But otherwise his revival plan consists mainly of a weak yen, old-time fiscal stimulus and nudges to corporate investment rather than freeing the private economy.

Korea still has much work to do in reforming its economy, but they can draw encouragement and build political support from their recent successes. Korea industrialized largely by following the export-led model of postwar Japan. Perhaps it's time for the erstwhile teacher to learn a lesson from its former student.
http://online.wsj.com/news/articles

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4 New Delhi's chief minister who cried 'Wolf, wolf' (Sunil Sethi in Business Standard) A memorably ironic headline when the Aam Aadmi Party (AAP) took power in New Delhi in late December appeared above an editorial commentary in a Pakistani daily: "AAP ki tareef?" it politely asked. Depending on the tone in which the question is posed in courtly Urdu, the double entendre is loaded. It seeks a formal introduction to someone never encountered before; at the same time, it can suggest a mocking rejection. A slight inflection of the voice and raised eyebrow turn the query on its head to mean: "Who the hell are you?"

Six weeks into its rule, more and more people are asking the question of the AAP in both senses of the phrase. The AAP's votaries argue that it is the country's best chance to clean up electoral politics, and that Arvind Kejriwal is the man to root out corruption by taking on big business interests and political lobbies.

But the party's critics also seem to be growing apace, even ahead of his resignation on Friday. The media is less wide-eyed about Mr Kejriwal; and his public wants to know whether he is capable of day-to-day governance in attending to the nuts-and-bolts administering of a large and complex city-state. Is he an anarchist, hell-bent on the politics of confrontation, or merely the boy who went out to tend his flock each morning and ran home crying "Wolf, wolf!"

So far as the chief minister's remit goes, Mr Kejriwal's main achievement after subsidising water and power is to actually "reward" his followers who defaulted on paying their electricity bills in 2012-13. With undue diligence, his government has located 24,036 such customers and decided to foot half their arrears and waive off penalties. What happens to the millions of others who honestly pay their bills on time? Are they expected to foot the largesse that flows at intervals from the AAP's high command?

Mr Kejriwal's big stick now is the Jan Lok Pal Bill. Without it in place, goes the argument, he cannot crack down on corruption in high places, nor impose law and order in the city-state. In a fit of pique, he has now resigned. That was possibly Mr Kejriwal's best bet. While the Bharatiya Janata Party sits quietly awaiting its chance with a wolfishly big grin, who, except the 24,036 defaulters rewarded for not paying their electricity bills, will listen to the boy who cries "Wolf, wolf!"? Meanwhile, minorities and women are not particularly safe in the capital; the roads are crumbling; garbage collection hasn't improved; and the state of government-run schools and hospitals remains much the same. What's more, intermittent power cuts have just begun.

http://www.business-standard.com/article/opinion/sunil-sethi-the-boy-who-cried-wolf-wolf-114021401628_1.html