1 Russian economy shrinks first time in five years
(Jill Treanor in The Guardian) The Russian economy has contracted for the first
time in five years after falling oil prices and sanctions imposed by western
governments began to take their toll. The prospects for the country’s economy
are expected to remain weak after President Vladimir Putin’s government
revealed that GDP in November was 0.5% lower than in the same month a year ago.
It is the first time since October 2009 that the
Russian economy has shrunk and comes at a time when the rouble has been
collapsing on foreign exchange markets after a near halving of the oil price
since June. Manufacturing, construction, agriculture and service sectors all
contracted in November, although energy, mining and the retail trade showed
continued growth.
Economists are warning that Russia – one of the
world’s biggest energy exporters – could be facing its first recession in five
years. The central bank fears the economy could shrink by up to 4.8% next year
if oil prices fail to recover from five-year lows.
The fail in the oil price comes at a time when
western sanctions imposed over Russia’s backing for separatists in Ukraine are
making it tough for the country’s banks to raise finance in the international
money markets, leading to billions of dollars being withdrawn from the country.
Dmitry Polevoy, the chief economist for Russia and
the Commonwealth of Independent States at ING Bank in Moscow, said things would
get worse with oil prices at their current levels. The dependency on oil has
led to a rout of the rouble on the foreign exchange markets, prompting an
emergency rise in interest rates to 17% from 12.5% earlier this month.
2 ‘Uncertain times’ for oil industry (BBC) The oil
and gas industry is set for a year of mergers and takeovers as a result of the
plummeting oil price, a business consultancy has predicted. PwC said 2015 may
bring the first hostile takeover in the sector in living memory.
It warned of "uncertain times" for the
estimated 440,000 people employed in the UK's oil and gas industry. The oil
price has fallen from $115 a barrel in the middle of the year to about $60.
Drew Stevenson, PwC's UK energy deals leader, said:
"Oil prices remaining at the current level for a sustained period will
light the touch-paper for mergers and acquisitions in 2015. PwC said the
industry would be "increasingly cash-constrained" with new debt
coming at a cost, and existing debt coming under increased scrutiny.
3 India’s Man of the Year (Rahul Singh in Khaleej
Times) My choice of India’s personality for 2014 has been pretty easy:The
64-year-old Narendra Damodardas Modi. He dominated India for most of the year,
right from the day the Bharatiya Janata Party (BJP) nominated him as its prime
ministerial candidate earlier in the year, to the BJP’s stunning and overwhelming
victory in that election, seven months ago.
Since then, he has continued to impose his
distinctive stamp on the country, the BJP winning elections in State after
State. Like him or not, It has been a remarkable performance for a man who was
once cynically belittled by senior Congress leader Mani Shankar Aiyar as a mere
chai-wala (tea-seller). Aiyar was absolutely right — Modi’s father was indeed
the owner of a tea-stall near a railway station in Gujarat and Narendra began his
working life selling and bringing cups of tea to customers.
“Look, even a chai-wala can aspire to be the Prime
Minister,” Modi and his supporters would say during the election campaign. It
was a telling statement that resonated loudly with the young generation,
particularly the first-time voters.
Yet, there is much that Modi has still to live down.
Though the courts may have cleared him, a question mark hangs over his role in
the horrific 2002 Gujarat riots, in which over 1,000 people, mostly Muslims,
died. His image as a polarising figure continues to linger. He has also somehow
been unable to control some of his more rabid, Hindutva supporters.
Nevertheless, all said and done, Modi almost
single-handedly led the BJP to a famous electoral victory in 2014. He has
become the most powerful Prime Minister India has had since Indira Gandhi in
the 1970s, with no serious rivals in his own party. An adoring nation virtually
lies at his feet. He has pressed all the right buttons. Now, he has to deliver
the goods.
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