1 Big job losses stare at big banks (Sydney Morning Herald) Big banks are likely to scrap 7,000 jobs over the next two years as lenders cut costs that account for 58% of expenses to offset the weakest credit growth since World War II, according to UBS. Lenders will reduce total staff numbers by 3.9% to 172,000 from 179,000, UBS analysts said in a note to clients. The focus on employment costs at banks mirror the challenge faced around the world by lenders battling slower revenue growth amid weak household and business confidence. UBS estimates housing credit grew from 1977 to 2010 at a 14% annual pace, and is currently expanding at 5.7%, the weakest rate since World War II.
2 Nigeria’s resource curse (The Khaleej Times) On January 1 Nigerians awoke to find that the price of gasoline had gone from just under $2 a gallon to almost $4 a gallon. Since the beginning of this week, tens of thousands of angry protesters have taken to the streets all over the country; several are dead. More than 80% of Nigerians live on less than $2 a day, according to the World Bank. Although most of its citizens are poor, Nigeria is resource rich. It is an OPEC member and almost all of the country’s foreign exchange earnings come from the exportation of oil. Nigeria is Africa’s top oil producer, producing more than 2 million barrels a day. Nigeria also has vast amounts of natural gas, semiprecious stones, coal, tin and other natural resources.
Nigeria is a classic case of the ‘resource curse’ — a country that generates huge amounts of wealth, but where the vast majority of citizens face a daily battle to put food on the table. So where does all the money go? It is true, as Nigerian politicians like to point out, that the country’s population — an estimated 155 million — dwarfs that of every other country that depends overwhelmingly on crude oil export. But corruption and mismanagement have a great deal to do with the fact that most Nigerians do not have access to basic services, such as decent roads, well-equipped schools, hospitals and clinics adequately stocked with medical supplies.
Nigerian politicians are among the best paid in the world. Nigerian senators, for example, purportedly make more than a $1 million a year. In 2010, the government earmarked more than $150 million to buy new aircraft for the presidential fleet. Nigeria’s presidential fleet (6 to 12 planes, depending on the source) is among the largest in the world, larger than the fleets of the presidents of the US and Germany. Even more shocking, the 2012 budget includes roughly $6.5 million to provide meals for the households of the president and vice president, and millions of dollars more for the purchase and refurbishment of furnishings.
3 No toilet, no bride for Indian men (The Wall Street Journal) When something is in short supply, common sense suggests that it should become more valuable. This intuition is borne out in the market for goods and services as well as the labor market. But could this logic also apply to women? According to India’s 2011 census, the sex ratio for children under six was recorded as 914 females to 1,000 males, a decline from 927 in 2001. This precipitous drop in the number of girls reflects the cultural fact of “son preference” as manifested through sex-selective abortion and relative neglect of girls compared to boys.
Given that there are fewer women relative to men, has the law of supply and demand kicked in to raise women’s “value”? A potentially important avenue through which an increase in women’s value may show up is in the marriage market. Demographer Christophe Guilmoto recently projected that in a worst case scenario, there may be as many as 50% more prospective grooms than brides in the coming three decades in India and China. This is a new variation on what demographers term the “marriage squeeze.”
One way to measure a potential increase in the value of women in the marriage market is to see if the bargaining equation has shifted in their favour, as opposed to the parents of prospective grooms. A much discussed government campaign from 2005 in the state of Haryana is often seen as evidence that this may indeed be happening. The state government launched a campaign popularly known as “No Toilet, No Bride,” which aimed to persuade women and their families that they should not marry a prospective groom unless they have or install a private latrine. The fact that this occurred in Haryana is significant given that along with neighbouring Punjab, it has the one of the most skewed sex ratios in the country at 877 girls for 1,000 boys.
4 Only 10% of India grads are employable (The Times of India) Chairman of the National assessment and accreditation council (NAAC) executive committee, Goverdhan Mehta, has called for an innovative approach to raise the employability of graduates passing out of universities with traditional arts, commerce and science degrees. “We need out-of-the-box thinking to tackle the issue, considering that barely 10% of the 3m students, who pass with these degrees every year, are considered employable in today’s competitive world,” he said on Saturday. Mehta said emphasis needs to be laid on blending skills with education for employment, entrepreneurship development, knowledge and creation of wealth. “The prevailing higher education system needs to be more flexible in terms of adapting to the modern-day changes. Promoting liberal education can be a good alternative in this direction to help the system come out of an age-old structured format,” he said.
5 Life’s worth nothing in San Salvador (Al Jazeera) In the dusty, rubbish-strewn streets of Mejicanos, a working-class district of San Salvador, the capital of El Salvador, Father Antonio Lopez Tercero points to the gang graffiti scarring the walls. Gang violence is one of the defining features of life in El Salvador today. In the capital alone, a city with a population of around two million, between 10 and 15 people are murdered daily: at least half of these deaths are gang-related and, in a climate of impunity, rarely is anyone caught. "Life is worth nothing in this country," Father Antonio says. "There is so much impunity. Killing someone is like killing a chicken."
'Padre Toño', as Father Antonio is known, is one of many whose lives are affected by the violence. But he is also one of the few prepared to work with the gang members; seeing them not just as criminals, but as victims of a divided society. "It takes no effort at all to go from being a victim to being an offender," he says. "All the resentment and accumulated senselessness of the world in which they've grown up means it is all too easy to cross over into violence."
6 The worst bureaucracy! Really? (The Economic Times) Bureaucracy bashing is India’s favourite national vocation. And for good reason. Our bureaucracy has its good share of crooks, criminals and cheats who need to be put away — with or without a Lokpal. The simple counter-question is, does the bureaucracy have a disproportionately larger share of crooks than in other professions in India, and the data clearly does not say a resounding yes. In fact, there is perhaps roughly an equal proportion of crooks in the corporate sector (where kickbacks are taken in large-scale procurement and bribing government), in politics, in the media (from paid news to fixing deals, blackmailing, etc), to professional service firms (reputed law firms becoming ‘payment gateways’ for bribes).
This article is meant to throw some light on the proverbial other side. It is not meant to deny or defend the existence of crooks in the Indian Administrative Service (IAS) or other civil services, but merely shows the other side, because there is one. In the din surrounding corruption, even the finest of minds are making the mistake of tarring everyone with the same brush, which is simply not correct. Ask yourself, would an N Chandra produce the magic of making TCS India’s largest IT company if he were reporting to a Pappu Yadav and not to S Ramadorai? Would Nandan Nilekani and Shibulal have created the globally-admired brand Infosys, but for NR Narayanamurthy’s fabled leadership, and instead if they had a Suresh Kalmadi to report to?
Sunday, January 15, 2012
Saturday, January 14, 2012
Oakland to lay off workers; America isn't a corporation; Austerity deepens European crisis; India media under fire; India PM: Reformer who never was
1 Oakland to lay off workers. (San Francisco Chronicle) In a drastic move to prepare for the loss of millions of dollars in state redevelopment funds this year, Oakland will hand layoff notices to 1,500 city employees next week, and 200 will eventually be dismissed, city leaders have said. The unusual move is necessary because, unlike some cities, Oakland uses redevelopment funds to help pay for the salaries of more than 200 workers in nearly a dozen city departments, including police, fire, City Council members, public works and the mayor's office. But to comply with seniority layoff rules, the city must give notice to half of its 3,000-worker force. Only police and firefighters will be exempt from receiving notices. The cuts are so deep, they will force a complete overhaul of City Hall, said Sue Piper, spokeswoman for Mayor Jean Quan.
2 America isn’t a corporation (Paul Krugman in The New York Times) There’s a problem in the whole notion that what this nation needs is a successful businessman as president: America is not, in fact, a corporation. Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company. Most relevant for our current situation, however, is the point that even giant corporations sell the great bulk of what they produce to other people, not to their own employees — whereas even small countries sell most of what they produce to themselves, and big countries like America are overwhelmingly their own main customers. And the fact that we mostly sell to ourselves makes an enormous difference when you think about policy.
Consider what happens when a business engages in ruthless cost-cutting. From the point of view of the firm’s owners (though not its workers), the more costs that are cut, the better. But the story is very different when a government slashes spending in the face of a depressed economy. Look at Greece, Spain, and Ireland, all of which have adopted harsh austerity policies. In each case, unemployment soared, because cuts in government spending mainly hit domestic producers. We’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.
3 ‘Austerity deepens European crisis’ (The Guardian) Europe has been plunged into a fresh crisis after France was stripped of its coveted AAA credit rating in a mass downgrade of nine eurozone countries by the ratings agency Standard & Poor's. S&P said austerity was driving Europe even deeper into financial crisis as it also cut Austria's triple-A rating, and relegated Portugal and Cyprus to junk status. The humiliating loss of France's top-rated status leaves Germany as the only other major economy inside the eurozone with a AAA rating, and rekindled financial market anxiety about a possible break-up of the single currency.
4 Why Indian media is under fire (Soutik Biswas, BBC) Has the explosion of media in India been a mixed blessing? With more than 70,000 newspapers and over 500 satellite channels in several languages, Indians are seemingly spoilt for choice and diversity. India is already the biggest newspaper market in the world - over 100 million copies sold each day. Advertising revenues have soared. In the past two decades, the number of channels has grown from one - the dowdy state-owned broadcaster Doordarshan - to more than 500, of which more than 80 are news channels.
But such robust growth, many believe, may have come at the cost of accuracy, journalistic ethics and probity. Economist Amartya Sen wrote in a recent article, that there are at least two huge barriers to the quality of Indian media. One is about professional laxity which leads to inaccuracies and mistakes. The other, he says, is a class bias in the choice of what news to cover and what to ignore. Class bias in newsrooms, say media pundits, is prevalent in big media all over the world. But class bias in reporting on a country where more than a third of its people live in abject poverty has more serious implications. Journalists can easily become uncritical cheerleaders for a high growth, low equity society.
Dr Sen actually misses the bigger crises in Indian media. There are serious concerns about trivialisation of content and the increasing concentration of media ownership in the hands of large corporate groups. There is now the culture of non-stop breaking news and, some fear, the transformation of news into a commodity. Most seriously, there is the scourge of what is called paid news, which involves influential people - mainly politicians - paying newspapers and news channels for positive coverage. It became widespread in the run-up to the 2009 elections.
5 Self-publishing is finding its feet (BBC) Tailored services like Amazon CreateSpace, Lulu and Smashwords have put creating and distributing a book firmly into the hands of anyone and everyone. Self-publishing specialists not only make unleashing a book into the world a free, five-minute process - but they also give authors the lion's share of the profits, in some cases as high as 80% or 90%. Traditional publishers, meanwhile, are more likely to give their authors around 25%.
6 Indonesian factory workers win against Nike (The Dawn) A Nike factory has agreed to pay $1m overtime back pay to Indonesian workers in a move that could force other suppliers of multinational companies to follow suit. Nearly 4,500 employees at one of the sportswear group`s suppliers, the PT Nikomas shoe plant in Banten province, will be compensated for close to 600,000 hours of overtime clocked up over the past two years. The out-of-court settlement, reached after nearly a year of negotiations, set a precedent for other workers, said Bambang Wirahyoso, national chairman of the trade union serikat Pekerja National. `This has the potential to send shockwaves through the Indonesian labour movement`, he said, adding that the victory had prepared the union to take on the fight for any workers who had been forced to work overtime without pay. Seattle-based Nike has been accused in the past of using child labour in its supply chain and in relation to working conditions in its 1,000 overseas supplier factories, which the company has taken steps to address.
7 How US leads the world in giving (Khaleej Times) After the 2008 financial crisis, economic growth took a tumble, and charitable giving would be expected to decline. Indeed, after the global recession, giving dipped in the US. Yet US giving to charities international in scope rose an estimated 15.3% in 2010 – the largest percentage increase of all categories, including religion, health or education. The trend also reveals America’s individualistic streak and near reverence for high-profile donors like former President Bill Clinton or Microsoft mogul Bill Gates who identify and solve problems. Topping the list of most generous companies with cash donations, compiled by Forbes magazine and the Chronicle of Philanthropy, is Walmart followed by Goldman Sachs and Wells Fargo. The three corporations gave $319 million, $315 million and $219 million, respectively. Overall, US charitable giving has steadily climbed, from less than $25 billion in 1970 to $290 billion in 2010, both in current dollars, reports Giving USA.
8 Early trouble for world’s youngest nation (Sydney Morning Herald) The trail of corpses begins about 270 metres from the corrugated metal gate of the UN compound and stretches for miles into the bush. There is an old man on his back, a young woman with her legs splayed, skirt bunched up around the hips and a whole family - man, woman, two children - all face down in the swamp grass, executed together.
South Sudan, born six months ago in great jubilation, is plunging into a vortex of violence. Bitter ethnic tensions that had largely been shelved for the sake of achieving independence have ruptured into a cycle of massacre and revenge. Western countries have invested billions of dollars in South Sudan, hoping it would overcome its deeply etched history of poverty, violence and ethnic fault lines to emerge as a stable, Western-friendly nation in a volatile region. Instead, heavily armed militias, the size of small armies, are now marching on villages and towns with impunity, sometimes with blatantly genocidal intent. Eight thousand fighters just besieged this small town in the middle of a vast expanse, razing huts, torching granaries, stealing tens of thousands of cows and methodically killing hundreds, possibly thousands, of men, women and children hiding in the bush. The raiders had even broadcast their massacre plans in advance.
9 India’s year without polio (Wall Street Journal) On January 13, 2012, India achieved a new milestone, completing one year without any reported cases of the wild polio virus. This means that for the first time, this country might be removed from the list of polio-endemic countries, the only nations which haven’t stopped the transmission of the indigenous wild polio virus, which include Nigeria, Afghanistan, Pakistan and India. In India, the last reported case was that of a two-year-old girl in West Bengal’s Howrah district in 2011. For the country that recorded the highest number of polio cases in 2009, this is a remarkable achievement, say health experts. Going forward, health specialists say that India will still be vulnerable from threat of importing the virus from neighboring countries. For instance, China, where the last indigenous polio case was recorded in 1994, had a polio case last year, which was traced to a visitor from Pakistan.
10 India PM Manmohan Singh: The reformer who never was (Sadanad Dhume in The Wall Street Journal) When Manmohan Singh was sworn in as India's 13th prime minister in 2004, few would have guessed that the country's highest political office would end up diminishing a leader widely admired at home and abroad. But today with GDP growth slowing, the rupee softening and the stock market in a funk, it's time to reassess the prime minister's record. Instead of using his position as a bully pulpit for reform, the 79-year-old presides over a government synonymous with policy paralysis and reckless populism. Its best known ideas include an unwieldy make-work scheme that distorts labor markets and breeds corruption, a misguided education policy that threatens to drown India's few excellent private schools in a sea of mediocrity and an ill-conceived food security bill proposal that will funnel subsidized grain toward the majority of the country's 1.2 billion citizens.
Yet if we remember, most people expected Mr. Singh to cut through red tape and unshackle the private sector. For many Indians, Mr. Singh, a soft-spoken economist with a reputation for probity, stood apart from the assorted ruffians and rabble rousers who make up the bulk of the political class. In hindsight, the prime minister ought to have been seen all along as less of a reformer and more of a faceless technocrat. Yes, as the finance minister who kicked off reforms in 1991, Mr. Singh scrapped industrial licensing, slashed import duties and made room for the private sector in businesses once reserved for government. But he did so in the face of a severe foreign-exchange crisis and under a prime minister, PV Narasimha Rao, who saw how the socialist pieties of his Congress Party had kept India poor.
Before becoming finance minister, Mr. Singh actually showed little promise as a reformer. He had spent much of the previous two decades—as chief economic advisor to the government, head of the Soviet-style Planning Commission and governor of the Reserve Bank of India, among other positions—propping up the very socialist edifice he later sought to dismantle. If observers had taken a close look at the nature of this long career, they would have had more realistic expectations. They should have seen that in 1991, Mr. Singh pushed reforms because his boss told him to. Put simply, his programs reflect his boss's priorities and always have. So since 2004, the prime minister has done what he usually does: take cues from his current boss.
11 Chennai’s IT dream turns turtle (Jayaraj Sivan in The Times of India) It makes good business sense to tear down an unoccupied Rs 200m IT park building and work up a high-value residential complex in its place. But it tells badly on the Tamil Nadu government’s IT policy. The demolition of the 19-storey IT park on LB Road in Adyar, Chennai for redevelopment is a reflection of such a flawed IT policy. Many builders in Tamil Nadu are stuck with completed or half-built standalone IT parks following the slump in the IT sector and the federal government’s policy shift from IT parks to special economic zones. Going by industry estimates, about 10 million sq ft of such concrete structures are available across Chennai, which carry a dead investment of Rs 20bn to Rs 25bn. Most of them are on the Old Mahabalipuram Road, which had shot into fame as the IT destination of Chennai.
12 Overstaying Indian journalists (The Hindu) The Madhya Pradesh government is owed Rs 180m in rent by journalists staying in government bungalows in the state capital. One hundred and eighty-seven journalists, representing the biggest media houses in the country, are living as “unauthorised occupants” in government bungalows in the most posh areas of Bhopal, otherwise home to cabinet ministers and top bureaucrats. According to the Directorate of Estates (DoE), the journalists collectively can be evicted immediately if the government gives the “green signal.”
The occupants include the biggest names in the business — correspondents and bureau chiefs of Press Trust of India, United News of India, Star News, Zee News, ETV, Sahara Samay, The Times of India, The Economic Times, The Week, Indian Express (former journalist), Hindustan Times, The Statesman, The Hitavada, India Tv, Dainik Bhaskar, Rajasthan Patrika, Hindustan, Dainik Jagran, Rashtriya Sahara, Jansatta, Nai Duniya, Swadesh, Lokmat, Deshbandhu and Navbharat Times — and a host of lesser known local media houses. “The houses are allotted for a year, with a maximum extension of two years. So, yes, they are all illegal occupants,” says Niyaz A. Khan, Joint Collector, DoE. However, the signal, says another official on condition of anonymity, may never come because the government does not want to “mess with the press.”
13 India could beat China in remittance game (Business Line) The amount of money sent by NRIs is likely to be $58 billion in 2011, slightly ahead of China's estimated receipts of $57 billion, says the World Bank. With this, India would beat China in receiving the highest remittances globally for five years in a row, from 2007. Countries such as Mexico and the Philippines were among the other top recipients of remittances from their respective emigrants.
2 America isn’t a corporation (Paul Krugman in The New York Times) There’s a problem in the whole notion that what this nation needs is a successful businessman as president: America is not, in fact, a corporation. Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company. Most relevant for our current situation, however, is the point that even giant corporations sell the great bulk of what they produce to other people, not to their own employees — whereas even small countries sell most of what they produce to themselves, and big countries like America are overwhelmingly their own main customers. And the fact that we mostly sell to ourselves makes an enormous difference when you think about policy.
Consider what happens when a business engages in ruthless cost-cutting. From the point of view of the firm’s owners (though not its workers), the more costs that are cut, the better. But the story is very different when a government slashes spending in the face of a depressed economy. Look at Greece, Spain, and Ireland, all of which have adopted harsh austerity policies. In each case, unemployment soared, because cuts in government spending mainly hit domestic producers. We’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.
3 ‘Austerity deepens European crisis’ (The Guardian) Europe has been plunged into a fresh crisis after France was stripped of its coveted AAA credit rating in a mass downgrade of nine eurozone countries by the ratings agency Standard & Poor's. S&P said austerity was driving Europe even deeper into financial crisis as it also cut Austria's triple-A rating, and relegated Portugal and Cyprus to junk status. The humiliating loss of France's top-rated status leaves Germany as the only other major economy inside the eurozone with a AAA rating, and rekindled financial market anxiety about a possible break-up of the single currency.
4 Why Indian media is under fire (Soutik Biswas, BBC) Has the explosion of media in India been a mixed blessing? With more than 70,000 newspapers and over 500 satellite channels in several languages, Indians are seemingly spoilt for choice and diversity. India is already the biggest newspaper market in the world - over 100 million copies sold each day. Advertising revenues have soared. In the past two decades, the number of channels has grown from one - the dowdy state-owned broadcaster Doordarshan - to more than 500, of which more than 80 are news channels.
But such robust growth, many believe, may have come at the cost of accuracy, journalistic ethics and probity. Economist Amartya Sen wrote in a recent article, that there are at least two huge barriers to the quality of Indian media. One is about professional laxity which leads to inaccuracies and mistakes. The other, he says, is a class bias in the choice of what news to cover and what to ignore. Class bias in newsrooms, say media pundits, is prevalent in big media all over the world. But class bias in reporting on a country where more than a third of its people live in abject poverty has more serious implications. Journalists can easily become uncritical cheerleaders for a high growth, low equity society.
Dr Sen actually misses the bigger crises in Indian media. There are serious concerns about trivialisation of content and the increasing concentration of media ownership in the hands of large corporate groups. There is now the culture of non-stop breaking news and, some fear, the transformation of news into a commodity. Most seriously, there is the scourge of what is called paid news, which involves influential people - mainly politicians - paying newspapers and news channels for positive coverage. It became widespread in the run-up to the 2009 elections.
5 Self-publishing is finding its feet (BBC) Tailored services like Amazon CreateSpace, Lulu and Smashwords have put creating and distributing a book firmly into the hands of anyone and everyone. Self-publishing specialists not only make unleashing a book into the world a free, five-minute process - but they also give authors the lion's share of the profits, in some cases as high as 80% or 90%. Traditional publishers, meanwhile, are more likely to give their authors around 25%.
6 Indonesian factory workers win against Nike (The Dawn) A Nike factory has agreed to pay $1m overtime back pay to Indonesian workers in a move that could force other suppliers of multinational companies to follow suit. Nearly 4,500 employees at one of the sportswear group`s suppliers, the PT Nikomas shoe plant in Banten province, will be compensated for close to 600,000 hours of overtime clocked up over the past two years. The out-of-court settlement, reached after nearly a year of negotiations, set a precedent for other workers, said Bambang Wirahyoso, national chairman of the trade union serikat Pekerja National. `This has the potential to send shockwaves through the Indonesian labour movement`, he said, adding that the victory had prepared the union to take on the fight for any workers who had been forced to work overtime without pay. Seattle-based Nike has been accused in the past of using child labour in its supply chain and in relation to working conditions in its 1,000 overseas supplier factories, which the company has taken steps to address.
7 How US leads the world in giving (Khaleej Times) After the 2008 financial crisis, economic growth took a tumble, and charitable giving would be expected to decline. Indeed, after the global recession, giving dipped in the US. Yet US giving to charities international in scope rose an estimated 15.3% in 2010 – the largest percentage increase of all categories, including religion, health or education. The trend also reveals America’s individualistic streak and near reverence for high-profile donors like former President Bill Clinton or Microsoft mogul Bill Gates who identify and solve problems. Topping the list of most generous companies with cash donations, compiled by Forbes magazine and the Chronicle of Philanthropy, is Walmart followed by Goldman Sachs and Wells Fargo. The three corporations gave $319 million, $315 million and $219 million, respectively. Overall, US charitable giving has steadily climbed, from less than $25 billion in 1970 to $290 billion in 2010, both in current dollars, reports Giving USA.
8 Early trouble for world’s youngest nation (Sydney Morning Herald) The trail of corpses begins about 270 metres from the corrugated metal gate of the UN compound and stretches for miles into the bush. There is an old man on his back, a young woman with her legs splayed, skirt bunched up around the hips and a whole family - man, woman, two children - all face down in the swamp grass, executed together.
South Sudan, born six months ago in great jubilation, is plunging into a vortex of violence. Bitter ethnic tensions that had largely been shelved for the sake of achieving independence have ruptured into a cycle of massacre and revenge. Western countries have invested billions of dollars in South Sudan, hoping it would overcome its deeply etched history of poverty, violence and ethnic fault lines to emerge as a stable, Western-friendly nation in a volatile region. Instead, heavily armed militias, the size of small armies, are now marching on villages and towns with impunity, sometimes with blatantly genocidal intent. Eight thousand fighters just besieged this small town in the middle of a vast expanse, razing huts, torching granaries, stealing tens of thousands of cows and methodically killing hundreds, possibly thousands, of men, women and children hiding in the bush. The raiders had even broadcast their massacre plans in advance.
9 India’s year without polio (Wall Street Journal) On January 13, 2012, India achieved a new milestone, completing one year without any reported cases of the wild polio virus. This means that for the first time, this country might be removed from the list of polio-endemic countries, the only nations which haven’t stopped the transmission of the indigenous wild polio virus, which include Nigeria, Afghanistan, Pakistan and India. In India, the last reported case was that of a two-year-old girl in West Bengal’s Howrah district in 2011. For the country that recorded the highest number of polio cases in 2009, this is a remarkable achievement, say health experts. Going forward, health specialists say that India will still be vulnerable from threat of importing the virus from neighboring countries. For instance, China, where the last indigenous polio case was recorded in 1994, had a polio case last year, which was traced to a visitor from Pakistan.
10 India PM Manmohan Singh: The reformer who never was (Sadanad Dhume in The Wall Street Journal) When Manmohan Singh was sworn in as India's 13th prime minister in 2004, few would have guessed that the country's highest political office would end up diminishing a leader widely admired at home and abroad. But today with GDP growth slowing, the rupee softening and the stock market in a funk, it's time to reassess the prime minister's record. Instead of using his position as a bully pulpit for reform, the 79-year-old presides over a government synonymous with policy paralysis and reckless populism. Its best known ideas include an unwieldy make-work scheme that distorts labor markets and breeds corruption, a misguided education policy that threatens to drown India's few excellent private schools in a sea of mediocrity and an ill-conceived food security bill proposal that will funnel subsidized grain toward the majority of the country's 1.2 billion citizens.
Yet if we remember, most people expected Mr. Singh to cut through red tape and unshackle the private sector. For many Indians, Mr. Singh, a soft-spoken economist with a reputation for probity, stood apart from the assorted ruffians and rabble rousers who make up the bulk of the political class. In hindsight, the prime minister ought to have been seen all along as less of a reformer and more of a faceless technocrat. Yes, as the finance minister who kicked off reforms in 1991, Mr. Singh scrapped industrial licensing, slashed import duties and made room for the private sector in businesses once reserved for government. But he did so in the face of a severe foreign-exchange crisis and under a prime minister, PV Narasimha Rao, who saw how the socialist pieties of his Congress Party had kept India poor.
Before becoming finance minister, Mr. Singh actually showed little promise as a reformer. He had spent much of the previous two decades—as chief economic advisor to the government, head of the Soviet-style Planning Commission and governor of the Reserve Bank of India, among other positions—propping up the very socialist edifice he later sought to dismantle. If observers had taken a close look at the nature of this long career, they would have had more realistic expectations. They should have seen that in 1991, Mr. Singh pushed reforms because his boss told him to. Put simply, his programs reflect his boss's priorities and always have. So since 2004, the prime minister has done what he usually does: take cues from his current boss.
11 Chennai’s IT dream turns turtle (Jayaraj Sivan in The Times of India) It makes good business sense to tear down an unoccupied Rs 200m IT park building and work up a high-value residential complex in its place. But it tells badly on the Tamil Nadu government’s IT policy. The demolition of the 19-storey IT park on LB Road in Adyar, Chennai for redevelopment is a reflection of such a flawed IT policy. Many builders in Tamil Nadu are stuck with completed or half-built standalone IT parks following the slump in the IT sector and the federal government’s policy shift from IT parks to special economic zones. Going by industry estimates, about 10 million sq ft of such concrete structures are available across Chennai, which carry a dead investment of Rs 20bn to Rs 25bn. Most of them are on the Old Mahabalipuram Road, which had shot into fame as the IT destination of Chennai.
12 Overstaying Indian journalists (The Hindu) The Madhya Pradesh government is owed Rs 180m in rent by journalists staying in government bungalows in the state capital. One hundred and eighty-seven journalists, representing the biggest media houses in the country, are living as “unauthorised occupants” in government bungalows in the most posh areas of Bhopal, otherwise home to cabinet ministers and top bureaucrats. According to the Directorate of Estates (DoE), the journalists collectively can be evicted immediately if the government gives the “green signal.”
The occupants include the biggest names in the business — correspondents and bureau chiefs of Press Trust of India, United News of India, Star News, Zee News, ETV, Sahara Samay, The Times of India, The Economic Times, The Week, Indian Express (former journalist), Hindustan Times, The Statesman, The Hitavada, India Tv, Dainik Bhaskar, Rajasthan Patrika, Hindustan, Dainik Jagran, Rashtriya Sahara, Jansatta, Nai Duniya, Swadesh, Lokmat, Deshbandhu and Navbharat Times — and a host of lesser known local media houses. “The houses are allotted for a year, with a maximum extension of two years. So, yes, they are all illegal occupants,” says Niyaz A. Khan, Joint Collector, DoE. However, the signal, says another official on condition of anonymity, may never come because the government does not want to “mess with the press.”
13 India could beat China in remittance game (Business Line) The amount of money sent by NRIs is likely to be $58 billion in 2011, slightly ahead of China's estimated receipts of $57 billion, says the World Bank. With this, India would beat China in receiving the highest remittances globally for five years in a row, from 2007. Countries such as Mexico and the Philippines were among the other top recipients of remittances from their respective emigrants.
Thursday, January 12, 2012
Income disparity is decade's risk; Orange juice price at record; Rhino killing unabated; A mother's final moments; Nigeria's fault lines; Manorexia
1 Economic troubles will be top risks of next decade (The New York Times) Severe income disparity and chronic fiscal imbalances are the top two risks facing business leaders and policy makers this year and over the next decade, the World Economic Forum said in a report. If these problems are not addressed, a result could be a “dystopian future for much of humanity,” according to the report. Signs of discontent with growing income gaps and economic problems stemming from the global debt crisis were already on the rise in 2011, as evidenced by the Occupy movement that began on Wall Street and quickly spread to other cities in the United States and around the world. Yet that might be only the beginning.
2 The danger in giving money to street kids (BBC) Travellers visiting poor and developing countries can get overwhelmed by poverty – specifically, by children on the street who are begging for money. But there are ethical implications in handing over a few coins to a child in need. Experts and experienced travellers often refrain from such acts of kindness because ultimately, they may do more harm than good. The general rule of Ryan Whitney, an international development specialist living in San Francisco, when travelling is to not give money to children on the street because often, particularly in India, the kids are being exploited by an adult – not necessarily their parent – who keeps the money. It’s “almost like slavery”, he said. “You don’t ever really know where this money goes.” ChildSafe International, a project that aims to protect children from abuse, cites evidence that street kids are vulnerable to exploitation, including by the sex tourism trade.
3 Orange juice price hits record (BBC) The price of orange juice on the global markets has hit a record high. Traders say the main reasons are safety concerns about juice from Brazil, the world's largest producer of orange juice, and cold weather in Florida. The US Food and Drug Administration said carbendazim, a fungicide, has been found in shipments from Brazil. Orange juice has risen by about 25% since the beginning of the year, to $2.12 a pound. In 2010-11, Brazil produced more than half of the world's orange juice, according to figures from the US Department of Agriculture. The US is the second-largest producer of orange juice, with production mainly concentrated in Florida.
4 Is it time for rhino owners to poison horns in an effort to kill end users? (That’s a Johannesburg Times online poll, following the killing of eight rhinos at the Kruger National Park. Early results showed more than 90% in favour of the poison idea to save the rhinos.) Eight rhino carcasses have been found in the Kruger National Park, SA on Tuesday. Park spokesman Reynold Thakhuli said all the carcasses were of adults which had been shot and de-horned. Last year, about 443 rhinos were killed for their horns, with 333 killed in 2010.
5 A mother’s final moments. Stampede at University of Johannesburg kills a woman as crowds throng to enrol for medical course (Daily Herald) All Kgositsile Sekwena dreamed of was enrolling for a medical course at the University of Johannesburg. Instead, he watched helplessly as his mother died in his arms after being crushed in a stampede. Gloria Sekwena, 47, had, like thousands of parents and young school-leavers, queued outside UJ’s entrance for several hours in the hope of submitting late applications. But Sekwena – a professional nurse who had travelled on December 29 from London where she and her husband have worked for several years – would never see her elder son realise his dreams. Described as “avoidable”, Sekwena’s death sent shock-waves through the country and resulted in the university’s vice-chancellor, Ihron Rensburg, allowing about 6,000 more would-be students to submit their late applications. At the same time, Higher Education Minister Blade Nzimande scrambled for answers on how to deal with more than 180,000 first-year students this year.
(The Sowetan adds:) Gloria Sekwena's handbag containing her identity document, her passport, house keys, car keys and wallet had been snatched while she was lying unconscious on the ground at the UJ campus. Apart from having to deal with the grief of losing their loved one, the family of Gloria Sekwena faced a daunting task of trying to obtain official documents to start with her funeral arrangements.
6 Nigeria’s fracture lines (Khaleej Times) Tensions are running high in Nigeria’s streets, days after the removal of gasoline subsidies at the start of the year and two weeks after horrific Christmas Day bombings of several churches around the country by radicals. Yet the government of President Goodluck Jonathan is steering through these hazards, giving Nigeria a chance to cast off the instability, poverty and corruption that have long plagued this country.
At 155 million people and rising, Nigeria is the world’s eighth-most-populous country and one of the hardest to govern. The country is deeply splintered, with more than 250 ethnic groups, 500 languages, a stark and sometimes violent Muslim-Christian divide, and a population now evenly divided between urban and rural areas. If these fracture lines were not enough, corruption is rampant, income inequality is sky-high, poverty and disease are pervasive, and the youth population is bulging, with half of all Nigerians under the age of 20.
7 What’s unique about the US? (Khaleej Times) If an American colossus like IBM can be turned around, can America itself? Are the “declinists” on the US, focused on hard power and America’s falling share of global output, missing something? The conspicuous failure of American hard power — in Iraq and Afghanistan — has tended to obscure the way American soft power has flourished over the past decade. For a while soft power was undercut because the US reputation was tarnished, but the Arab awakening has demonstrated how powerful American-driven social media are in opening up closed societies. At Harvard, Joseph Nye, the professor and former dean of the Kennedy School of Government, made an interesting point. He noted that a rising China has 1.3 billion citizens. But America at its best has seven billion in that it draws on the world’s talents, as its corporations and colleges demonstrate. I agree. That’s not because another American century is dawning — it’s not; nor because the power shift to Asia is illusory; nor because US problems of paralysed government, high deficits and inadequate schools are negligible. No, it’s because the defeat of American hard power has been overdrawn and the magnetism of American soft power underestimated.
8 Dangerous male fad: Manorexia (Sydney Morning Herald) Bodybuilding is all about sacrifice and size, but where do you draw the line in a world where body image is becoming ever more important? This is the tragic reality for an increasing number of young, vulnerable men whose response to societal pressure is to develop a dangerous condition called muscle dysmorphia – which drives them to bulk up to breaking point. Sometimes called "Manorexia", the condition is an "extreme form of wanting to be really, really big", said Stuart Murray, a psychologist who recently completed a PHD on muscle dysmorphia and male body image. Dr Murray said the rates of body dissatisfaction among men had tripled in the past 30 years.
But as young men clamour to follow their bodybuilding heroes to potential stardom, not all are able to maintain a healthy life balance. Amateur bodybuilder-turned-internet-sensation, Azyz 'Zyzz' Sergeyevich Shavershian was a case in point. He transformed himself from "skinny kid" into amateur bodybuilder and attracted a massive Facebook following, but died of an undiagnosed heart condition in Thailand in August last year. Dr Murray attributes the rise of Manorexia to the increasing number of men whose self-esteem is directly linked to their body.
9 When in doubt, spout! (Nadeem F Paracha in The Dawn) Every time he used to see a religious inscription painted or plastered across the back of a vehicle, a friend of mine used to say that the owner of the vehicle had doubts about his faith. “Alhamdulillah, I am a Muslim and a Pakistani.” How often does one come across statements such as this? But what does such a declaration really mean in a country where more than 95% of the population is Muslim – and, of course, Pakistani? Why do we keep hearing it over and over again? Do most Pakistanis have doubts about their religious and patriotic inclinations? Whom are they talking to? The reasons are rather simple. Ours is a country where there is no one cohesive understanding of faith or culture.
Though there is nothing wrong in being a diverse society (in fact the diversity should be celebrated), the problem starts when the state and certain intellectual and religious circles begin to shape and enforce a single concept of “correct religion” and “true patriotism.” When this supposedly correct version of religious belief and nationalism is given constant currency and propagation, an overriding social psyche starts to develop in which anyone criticising or even debating this version automatically becomes suspect and is likely to be accused of being “anti-Islam” and (thus) “anti-Pakistan.” Think about it. And by the way, I too must declare: I am a Muslim and a Pakistani. Just in case.
10 Germany may be on the brink (Bloomberg Businessweek) Germany may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011. Europe’s largest economy shrank “roughly” 0.25% in the fourth quarter from the third, the Federal Statistics Office said in an unofficial estimate. Economists such as Christian Schulz at Berenberg Bank expect gross domestic product to contract again in the current quarter. A recession is defined as two consecutive quarters of declining GDP.
Growth slowed to 3% in 2011 from 3.7% in 2010, which was the most since German reunification two decades earlier, the statistics office said. The economy last contracted in 2009, when it was in the throes of the global financial crisis. Unemployment at a two-decade low may bolster growth this year by supporting consumer spending.
11 Five businessmen who will watch Uttar Pradesh results closely. (The Economic Times) Manoj Gaur of Jaypee Group (Expressways, F-1 race track and thermal power project in UP), Anil Ambani (Dadri power project, two road projects in UP), Subrata Roy of Sahara Group (11 townships in UP), Ponty Chadha of Wave Group (manages entire wholesale end of Rs 60bn liquor trade in UP, 5 sugar mills, integrated township) and Kushagra Bajaj of Bajaj Hindusthan (presence in sugar, power sectors in UP).
12 Indian bureaucrats worst in Asia (The Times of India and The Deepika) Indian bureaucracy is the worst in Asia with a 9.21 rating out of 10, according to a report by a prestigious consulting firm based in Hong Kong. India fared worse than Vietnam (rated at 8.54), Indonesia (8.37), Philippines (7.57) and China (7.11), said the report by Political & Economic Risk Consultancy Ltd. Singapore remained the best with a rating of 2.25, followed by Hong Kong (3.53), Thailand (5.25), Taiwan (5.57), Japan (5.77), South Korea (5.87) and Malaysia (5.89). The report said India's inefficient bureaucracy was largely responsible for most of the biggest complaints that business executive have about the country.
"This gives them (bureaucrats) terrific powers and could be one of the main reasons why average Indians as well as existing and would-be foreign investors perceive India's bureaucrats as negatively as they do," said the report. But there were plus points when India was compared to countries within the economic development group. In the 2011-12 Global Competitiveness Report of the World Economic Forum, India ranked behind China but ahead of Russia and Brazil for the burden of government regulations as well as for the burden of customs procedures.
13 A 30-storey building in 15 days (The Times of India) The Chinese tycoon behind a 30-storey energy-saving building that went up in just 15 days said he intends to duplicate the model across the vast and heavily polluted nation. The prefabricated building, the five-star T30 Hotel at Dongting lake, Hunan province, that opens on January 18, became an internet sensation after time-lapse video posted online showed it being constructed by 200 builders in just 360 hours .
Zhang Yue, the billionaire chief executive of the Broad Group air conditioning company, said the speed with which his buildings go up reduces waste of materials and energy. He said the buildings, which feature quadrupleglazed windows and only use energy-saving lighting, would become his biggest business in 2013. "In 2013 we will build 20 buildings a month and by 2014, we'll be up to 50 buildings a month. And that's just from one factory," he said.
14 Is the Indian prime minister a teapot? (Business Line) Imagine: Mummy as Congress President and Sonny as Prime Minister. The world will snigger quietly. But the Congress — should it be so fortunate as to form the next government — will say it has solved the one-horse, two-riders problem. Bad people will wonder who the PM really is, just as they used to do about North Korea when Kim squared ran the country. For the record, it should be mentioned that just as Mummy has asked Rahul to earn his spurs in UP, Daddy (Kim Il Sung) asked Sonny (Kim Jong Il) to earn his spurs with the North Korean nuclear programme. That Great Leader took his time and after two-and-a-half decades, Kim Jr managed a bang in 2009. How long will ours take?
Jokes aside, the Prime Minister is an office of the Constitution, not a teapot to be passed on as a family heirloom. Indeed, the whole idea of the Westminster Model was to get away from monarchical practices. Yet, here, we are staring at the possibility of a Queen Mother and a King in just a few months' time. And it is only in the Congress — and that too at the level of the Prime Minister — that this inheritance thing works. No other party has managed to make a go of it, though the DMK (in Tamil Nadu) has been trying very hard, without much success. So, here's a suggestion for Team Anna and TV anchors: Let them ask every Congress MP under the age of 50 the following question: “In what way do you think you are worse than Rahul Gandhi?.” Not only will India's real scab (or scam) be scratched open, TRPs will also shoot up.
15 India’s investment pipeline is getting weaker (Financial Express) With Rs 1.39trn worth of projects on hand in December last year, it is obvious India has enough of a project pipeline to sustain a high level of investment for the near-to-medium term. But what is alarming, as CMIE’s latest CapEx data shows, there has been a 41% fall in the value of new investments announced in the December quarter, which means the pipeline is getting weaker. The value of new investments per quarter rose from Rs 667bn in FY94-FY04 to Rs 1.63trn in FY05-FY06 and Rs 5.14trn in FY07-FY09. It then started falling, to Rs 4.16trn in FY10 and Rs 4.09trn in FY11—for the June quarter in FY12, it fell to Rs 3.10trn, to Rs 2.27trn in September and finally to Rs 1.88trn in December.
Not surprisingly, the largest proportion of stalled projects are in the electricity sector, a combination of the problems various ultra-mega power plants as well as others are facing when it comes to coal and gas supplies as well as the sharp deterioration in the finances of the sector — annual power sector losses rose from Rs 270bn in 2006-07 to Rs 635bn in 2009-10 and the outstandings of state electricity boards rose to Rs 3.1trn in 2009-10.
2 The danger in giving money to street kids (BBC) Travellers visiting poor and developing countries can get overwhelmed by poverty – specifically, by children on the street who are begging for money. But there are ethical implications in handing over a few coins to a child in need. Experts and experienced travellers often refrain from such acts of kindness because ultimately, they may do more harm than good. The general rule of Ryan Whitney, an international development specialist living in San Francisco, when travelling is to not give money to children on the street because often, particularly in India, the kids are being exploited by an adult – not necessarily their parent – who keeps the money. It’s “almost like slavery”, he said. “You don’t ever really know where this money goes.” ChildSafe International, a project that aims to protect children from abuse, cites evidence that street kids are vulnerable to exploitation, including by the sex tourism trade.
3 Orange juice price hits record (BBC) The price of orange juice on the global markets has hit a record high. Traders say the main reasons are safety concerns about juice from Brazil, the world's largest producer of orange juice, and cold weather in Florida. The US Food and Drug Administration said carbendazim, a fungicide, has been found in shipments from Brazil. Orange juice has risen by about 25% since the beginning of the year, to $2.12 a pound. In 2010-11, Brazil produced more than half of the world's orange juice, according to figures from the US Department of Agriculture. The US is the second-largest producer of orange juice, with production mainly concentrated in Florida.
4 Is it time for rhino owners to poison horns in an effort to kill end users? (That’s a Johannesburg Times online poll, following the killing of eight rhinos at the Kruger National Park. Early results showed more than 90% in favour of the poison idea to save the rhinos.) Eight rhino carcasses have been found in the Kruger National Park, SA on Tuesday. Park spokesman Reynold Thakhuli said all the carcasses were of adults which had been shot and de-horned. Last year, about 443 rhinos were killed for their horns, with 333 killed in 2010.
5 A mother’s final moments. Stampede at University of Johannesburg kills a woman as crowds throng to enrol for medical course (Daily Herald) All Kgositsile Sekwena dreamed of was enrolling for a medical course at the University of Johannesburg. Instead, he watched helplessly as his mother died in his arms after being crushed in a stampede. Gloria Sekwena, 47, had, like thousands of parents and young school-leavers, queued outside UJ’s entrance for several hours in the hope of submitting late applications. But Sekwena – a professional nurse who had travelled on December 29 from London where she and her husband have worked for several years – would never see her elder son realise his dreams. Described as “avoidable”, Sekwena’s death sent shock-waves through the country and resulted in the university’s vice-chancellor, Ihron Rensburg, allowing about 6,000 more would-be students to submit their late applications. At the same time, Higher Education Minister Blade Nzimande scrambled for answers on how to deal with more than 180,000 first-year students this year.
(The Sowetan adds:) Gloria Sekwena's handbag containing her identity document, her passport, house keys, car keys and wallet had been snatched while she was lying unconscious on the ground at the UJ campus. Apart from having to deal with the grief of losing their loved one, the family of Gloria Sekwena faced a daunting task of trying to obtain official documents to start with her funeral arrangements.
6 Nigeria’s fracture lines (Khaleej Times) Tensions are running high in Nigeria’s streets, days after the removal of gasoline subsidies at the start of the year and two weeks after horrific Christmas Day bombings of several churches around the country by radicals. Yet the government of President Goodluck Jonathan is steering through these hazards, giving Nigeria a chance to cast off the instability, poverty and corruption that have long plagued this country.
At 155 million people and rising, Nigeria is the world’s eighth-most-populous country and one of the hardest to govern. The country is deeply splintered, with more than 250 ethnic groups, 500 languages, a stark and sometimes violent Muslim-Christian divide, and a population now evenly divided between urban and rural areas. If these fracture lines were not enough, corruption is rampant, income inequality is sky-high, poverty and disease are pervasive, and the youth population is bulging, with half of all Nigerians under the age of 20.
7 What’s unique about the US? (Khaleej Times) If an American colossus like IBM can be turned around, can America itself? Are the “declinists” on the US, focused on hard power and America’s falling share of global output, missing something? The conspicuous failure of American hard power — in Iraq and Afghanistan — has tended to obscure the way American soft power has flourished over the past decade. For a while soft power was undercut because the US reputation was tarnished, but the Arab awakening has demonstrated how powerful American-driven social media are in opening up closed societies. At Harvard, Joseph Nye, the professor and former dean of the Kennedy School of Government, made an interesting point. He noted that a rising China has 1.3 billion citizens. But America at its best has seven billion in that it draws on the world’s talents, as its corporations and colleges demonstrate. I agree. That’s not because another American century is dawning — it’s not; nor because the power shift to Asia is illusory; nor because US problems of paralysed government, high deficits and inadequate schools are negligible. No, it’s because the defeat of American hard power has been overdrawn and the magnetism of American soft power underestimated.
8 Dangerous male fad: Manorexia (Sydney Morning Herald) Bodybuilding is all about sacrifice and size, but where do you draw the line in a world where body image is becoming ever more important? This is the tragic reality for an increasing number of young, vulnerable men whose response to societal pressure is to develop a dangerous condition called muscle dysmorphia – which drives them to bulk up to breaking point. Sometimes called "Manorexia", the condition is an "extreme form of wanting to be really, really big", said Stuart Murray, a psychologist who recently completed a PHD on muscle dysmorphia and male body image. Dr Murray said the rates of body dissatisfaction among men had tripled in the past 30 years.
But as young men clamour to follow their bodybuilding heroes to potential stardom, not all are able to maintain a healthy life balance. Amateur bodybuilder-turned-internet-sensation, Azyz 'Zyzz' Sergeyevich Shavershian was a case in point. He transformed himself from "skinny kid" into amateur bodybuilder and attracted a massive Facebook following, but died of an undiagnosed heart condition in Thailand in August last year. Dr Murray attributes the rise of Manorexia to the increasing number of men whose self-esteem is directly linked to their body.
9 When in doubt, spout! (Nadeem F Paracha in The Dawn) Every time he used to see a religious inscription painted or plastered across the back of a vehicle, a friend of mine used to say that the owner of the vehicle had doubts about his faith. “Alhamdulillah, I am a Muslim and a Pakistani.” How often does one come across statements such as this? But what does such a declaration really mean in a country where more than 95% of the population is Muslim – and, of course, Pakistani? Why do we keep hearing it over and over again? Do most Pakistanis have doubts about their religious and patriotic inclinations? Whom are they talking to? The reasons are rather simple. Ours is a country where there is no one cohesive understanding of faith or culture.
Though there is nothing wrong in being a diverse society (in fact the diversity should be celebrated), the problem starts when the state and certain intellectual and religious circles begin to shape and enforce a single concept of “correct religion” and “true patriotism.” When this supposedly correct version of religious belief and nationalism is given constant currency and propagation, an overriding social psyche starts to develop in which anyone criticising or even debating this version automatically becomes suspect and is likely to be accused of being “anti-Islam” and (thus) “anti-Pakistan.” Think about it. And by the way, I too must declare: I am a Muslim and a Pakistani. Just in case.
10 Germany may be on the brink (Bloomberg Businessweek) Germany may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011. Europe’s largest economy shrank “roughly” 0.25% in the fourth quarter from the third, the Federal Statistics Office said in an unofficial estimate. Economists such as Christian Schulz at Berenberg Bank expect gross domestic product to contract again in the current quarter. A recession is defined as two consecutive quarters of declining GDP.
Growth slowed to 3% in 2011 from 3.7% in 2010, which was the most since German reunification two decades earlier, the statistics office said. The economy last contracted in 2009, when it was in the throes of the global financial crisis. Unemployment at a two-decade low may bolster growth this year by supporting consumer spending.
11 Five businessmen who will watch Uttar Pradesh results closely. (The Economic Times) Manoj Gaur of Jaypee Group (Expressways, F-1 race track and thermal power project in UP), Anil Ambani (Dadri power project, two road projects in UP), Subrata Roy of Sahara Group (11 townships in UP), Ponty Chadha of Wave Group (manages entire wholesale end of Rs 60bn liquor trade in UP, 5 sugar mills, integrated township) and Kushagra Bajaj of Bajaj Hindusthan (presence in sugar, power sectors in UP).
12 Indian bureaucrats worst in Asia (The Times of India and The Deepika) Indian bureaucracy is the worst in Asia with a 9.21 rating out of 10, according to a report by a prestigious consulting firm based in Hong Kong. India fared worse than Vietnam (rated at 8.54), Indonesia (8.37), Philippines (7.57) and China (7.11), said the report by Political & Economic Risk Consultancy Ltd. Singapore remained the best with a rating of 2.25, followed by Hong Kong (3.53), Thailand (5.25), Taiwan (5.57), Japan (5.77), South Korea (5.87) and Malaysia (5.89). The report said India's inefficient bureaucracy was largely responsible for most of the biggest complaints that business executive have about the country.
"This gives them (bureaucrats) terrific powers and could be one of the main reasons why average Indians as well as existing and would-be foreign investors perceive India's bureaucrats as negatively as they do," said the report. But there were plus points when India was compared to countries within the economic development group. In the 2011-12 Global Competitiveness Report of the World Economic Forum, India ranked behind China but ahead of Russia and Brazil for the burden of government regulations as well as for the burden of customs procedures.
13 A 30-storey building in 15 days (The Times of India) The Chinese tycoon behind a 30-storey energy-saving building that went up in just 15 days said he intends to duplicate the model across the vast and heavily polluted nation. The prefabricated building, the five-star T30 Hotel at Dongting lake, Hunan province, that opens on January 18, became an internet sensation after time-lapse video posted online showed it being constructed by 200 builders in just 360 hours .
Zhang Yue, the billionaire chief executive of the Broad Group air conditioning company, said the speed with which his buildings go up reduces waste of materials and energy. He said the buildings, which feature quadrupleglazed windows and only use energy-saving lighting, would become his biggest business in 2013. "In 2013 we will build 20 buildings a month and by 2014, we'll be up to 50 buildings a month. And that's just from one factory," he said.
14 Is the Indian prime minister a teapot? (Business Line) Imagine: Mummy as Congress President and Sonny as Prime Minister. The world will snigger quietly. But the Congress — should it be so fortunate as to form the next government — will say it has solved the one-horse, two-riders problem. Bad people will wonder who the PM really is, just as they used to do about North Korea when Kim squared ran the country. For the record, it should be mentioned that just as Mummy has asked Rahul to earn his spurs in UP, Daddy (Kim Il Sung) asked Sonny (Kim Jong Il) to earn his spurs with the North Korean nuclear programme. That Great Leader took his time and after two-and-a-half decades, Kim Jr managed a bang in 2009. How long will ours take?
Jokes aside, the Prime Minister is an office of the Constitution, not a teapot to be passed on as a family heirloom. Indeed, the whole idea of the Westminster Model was to get away from monarchical practices. Yet, here, we are staring at the possibility of a Queen Mother and a King in just a few months' time. And it is only in the Congress — and that too at the level of the Prime Minister — that this inheritance thing works. No other party has managed to make a go of it, though the DMK (in Tamil Nadu) has been trying very hard, without much success. So, here's a suggestion for Team Anna and TV anchors: Let them ask every Congress MP under the age of 50 the following question: “In what way do you think you are worse than Rahul Gandhi?.” Not only will India's real scab (or scam) be scratched open, TRPs will also shoot up.
15 India’s investment pipeline is getting weaker (Financial Express) With Rs 1.39trn worth of projects on hand in December last year, it is obvious India has enough of a project pipeline to sustain a high level of investment for the near-to-medium term. But what is alarming, as CMIE’s latest CapEx data shows, there has been a 41% fall in the value of new investments announced in the December quarter, which means the pipeline is getting weaker. The value of new investments per quarter rose from Rs 667bn in FY94-FY04 to Rs 1.63trn in FY05-FY06 and Rs 5.14trn in FY07-FY09. It then started falling, to Rs 4.16trn in FY10 and Rs 4.09trn in FY11—for the June quarter in FY12, it fell to Rs 3.10trn, to Rs 2.27trn in September and finally to Rs 1.88trn in December.
Not surprisingly, the largest proportion of stalled projects are in the electricity sector, a combination of the problems various ultra-mega power plants as well as others are facing when it comes to coal and gas supplies as well as the sharp deterioration in the finances of the sector — annual power sector losses rose from Rs 270bn in 2006-07 to Rs 635bn in 2009-10 and the outstandings of state electricity boards rose to Rs 3.1trn in 2009-10.
Wednesday, January 11, 2012
Corn for ethanol up 280%; In Egypt, power hinges on men; Fiat boss fears for Europe's future; Skyscrapers and financial crashes; Kodak moment passes
1 Corn use for ethanol goes up 280% (San Francisco Chronicle) Ethanol refiners have increased their consumption of corn 280% since 2005. The fuel additive took more than 40% of the total US crop last year, pushing up corn prices and topping the amount used as animal feed, according to the Agriculture Department. Cattle and chicken producers cut back their output as profit margins narrowed, though the pressure may ease in coming years after a tax credit for ethanol producers expired on Dec. 31
2 In Egypt, power still hinges on men (The New York Times) At first Samira Ibrahim was afraid to tell her father that Egyptian soldiers had detained her in Tahrir Square in Cairo, stripped off her clothes, and watched as she was forcibly subjected to a “virginity test.” But when her father, a religious conservative, saw electric prod marks on her body, they revived memories of his own detention and torture under President Hosni Mubarak’s government. “History is repeating itself,” he told her, and together they vowed to file a court case against the military rulers, to claim “my rights,” as Ms. Ibrahim later recalled. That case has proved successful so far. For the first time last month, an administrative court challenged the authority of the military council and banned such “tests.” But nearly a year after Mr Mubarak’s ouster, Ms. Ibrahim’s story in many ways illustrates the paradoxical position of women in the new Egypt. Emboldened by the revolution to claim a new voice in public life, many are finding that they are still dependent on the protection of men, and that their greatest power is not as direct actors but as symbols of the military government’s repression.
3 How TV newscasts are changing in the era of fragmented media (The New York Times) There was a time when each of the Big Three nightly newscasts on American television tended to open with the same story — the latest campaign speech, a new government study or perhaps a big snowstorm. That time is gone. Influenced by cable and the Internet, the nightly newscasts are shaking up conventions that stretch back 50 years, seeking to distinguish themselves by picking different stories and placing them in different orders. “The three evening newscasts have become more different from one another than at any time I can remember,” said Bill Wheatley, who worked at NBC News for 30 years and now teaches at Columbia. The differences provide a stark illustration of the state of the news media — much more fragmented than ever, but also arguably more creative. Viewers these days “make their own choices,” said Ben Sherwood, the president of ABC News. “They pick what matters most to them, and we are trying to be adaptive and responsive to those sweeping changes.”
4 Europe’s future in doubt, warns Fiat boss (The Guardian) Europe is "playing with fire" and its future is in doubt if it doesn't "get serious," the boss of the Italian car giant Fiat has warned, as ratings agency Fitch put Italy on notice of a credit downgrade. Sergio Marchionne, chief of Fiat and Chrysler, said the European debt crisis was likely to flatten his business for the next two years. Marchionne said: "One of the things we need to realise is that the world is fundamentally interconnected. We have ended up being accountable to a lot of people who financed our public debt.
Europe is being called to task to solve a number of issues. If we don't acquire the confidence of the financial markets, the future of Europe is doubtful." His strongly worded warning to Europe's politicians came as Fitch said Italy could see its A+ rating cut by the end of the month. Italy has seen its borrowing costs rise to eye-watering levels as confidence in the future of the single currency has been rocked. Yields on 10-year Italian bonds, which determine the interest rate Rome has to pay to borrow, stood at 7.14%. A rate of 7% is widely viewed as unsustainable and was the point at which Portugal, Greece and the Irish Republic were forced to seek a bailout.
5 Skyscrapers and financial crises (The Guardian) There is an "unhealthy correlation" between the building of skyscrapers and subsequent financial crashes, according to Barclays Capital. Examples include the Empire State building, built as the Great Depression was underway, and the current world's tallest, the Burj Khalifa, built just before Dubai almost went bust. China is currently the biggest builder of skyscrapers, the bank said. India also has 14 skyscrapers under construction.
The world's first skyscraper, the Equitable Life building in New York, was completed in 1873 and coincided with a five-year recession. It was demolished in 1912. Other examples include Chicago's Willis Tower (which was formerly known as the Sears Tower) in 1974, just as there was an oil shock and the US dollar's peg to gold was abandoned. And Malaysia's Petronas Towers in 1997, which coincided with the Asian financial crisis.
The findings might be a concern for Londoners, who are currently seeing the construction of what will be Western Europe's tallest building, the Shard. Investors should be most concerned about China, which is currently building 53% of all the tall buildings in the world, the bank said. In India, billionaire Mukesh Ambani built his own skyscraper in Mumbai - a 27-storey residence believed to be the world's most expensive home. "Today India has only two of the world's 276 skyscrapers over 240m in height, yet over the next five years it intends to complete 14 new skyscrapers," according to Barclays Capital.
6 Virtual shopping agent is round the corner (Gregory Roekens, Wunderman's UK chief technology officer, to BBC) I think 2012 will bring more "screenless" interfaces, like Apple's Siri. I want an interface where when I'm driving I can buy shopping by just speaking. Speech recognition has become amazingly good. It's an added interface that will be another tool for users.
What consumers will do in the future is empower a virtual assistant to do your weekly shopping for you, because it will know what you eat, your favourite stuff, what you're allergic to and so on. In the future we will empower our technology to make purchase decisions on our behalf. The question is, as marketers, who do you target, who do you communicate with? Is it the consumer? Or the automated agent?
7 Ten 100-year predictions that came true (BBC) In 1900, an American civil engineer, John Elfreth Watkins made a number of predictions about what the world would be like in 2000. How did he do? Here are 10 that he got right: 1. Digital colour photography 2. The rising height of Americans. "Americans will be taller by from one to two inches." 3. Mobile phones 4. Pre-prepared meals 5. Slowing population growth 6. Hothouse vegetables. “Winter will be turned into summer and night into day by the farmer”, said Watkins, “with electric wires under the soil and large gardens under glass.” 7. Television 8. Tanks "Huge forts on wheels will dash across open spaces at the speed of express trains of today." 9. Bigger fruit. "Strawberries as large as apples will be eaten by our great-great-grandchildren." 10. The Acela Express. "Trains will run two miles a minute normally. Express trains 150 miles per hour."
And four he didn’t get right: 1. No more C, X or Q. "There will be no C, X or Q in our everyday alphabet. They will be abandoned because unnecessary." 2. Everybody will walk 10 miles a day 3. No more cars in large cities 4. No mosquitoes or flies.
8 The Kodak moment passes (Mint) Reports indicate that the Eastman Kodak Company may file for bankruptcy soon. The company’s slow decline can be traced back to the 1980s when the company’s stranglehold on the US photographic film market came under attack from “upstarts” like Fujifilm. That gentle decline accelerated into a headlong tumble over a cliff when the company failed to respond to the emergence of cheap, mass-market digital cameras. Instead, it clung to hope that the vastly more profitable film market would sustain. It did not.
What did Kodak do wrong? Essentially, not a lot. This cliche will become more popular in the days to come, but Kodak truly was the Apple-like technology disruptor of its day. The company owns hundreds of technology patents and, ironically, even invented the digital camera in 1975. It was also a famously generous employer, paying employees well and rewarding with generous pensions. But while being good to people and fantastic with patents and technology, it made one grave error: Kodak assumed that it was strong enough to cope, if not determine, the speed at which the mass market adopted disruptions.
Companies that find themselves on pedestals today will do well to pay heed. It isn’t simply enough to invent, innovate or generate thousands of patents. The ability to invent must go hand in hand with an eye on the market. Or decline will be swift, and it is getting swifter. Kodak took 175 years to rise, peak and decline. MySpace took five.
9 No ‘kolaveri’ for corruption in India (Khaleej Times) Everyone has a studied opinion on Anna Hazare’s failure to stay the distance. There is a large school that is of the opinion Hazare turned smug and arrogant with the heady elixir of power and morphed from catalyst to cowboy. The biggest segment of the public that did not turn up for the next round of fasting pressure wasn’t just bored with it all, they just came to the conclusion that corruption was so deeply ingrained in the system that getting hyper about it was pointless…no Lokpal Bill was going to shoo it away. No great things are achieved without great effort and no one wanted to heave themselves to making it. One factor was the unspoken apathy of the public that could stir itself up to celebrate happy, silly verse like Kolaveri di with 40 million hits but unable to churn up anywhere near enough kolaveri to combat the blight that has eroded the body public for sixty odd years. Future imperfect triumphs.
There has to be a collective will to achieve an end. It wasn’t there. It is very clear that the Hazare chariot caught fire and lost a wheel because there was no Indian Spring and the winter of discontent simply sapped the will. Hazare got lost in the wilderness and no one wanted to rescue him. The Indian people failed to rise to the occasion, seeking salvation either in bad mouthing Hazare, ridiculing him or opting cynically to gild corruption as a long term resident in the nation. The public was happy to pass the buck and blame different factors, everything but themselves. After all, what can we do? The answer to that is simple. We can talk, we can write letters of moaning empathy, even wail about our own sloth in fighting the curse of corruption so far as no sacrifice is demanded of us. That is just it. Hazare lost because his army deserted him, a billion possible soldiers prematurely decided this was not their fight, that they had places to go, work to do, bills to pay, a life to run, and if a bit of that payment was under the table, so be it.
10 India PM says malnourishment a national shame (Times of India) Calling malnourishment "a national shame", Prime Minister Manmohan Singh said India cannot hope for a healthy future with 42% of children aged below five years being underweight. Releasing the Hungama survey that measured the nutrition status of more than one hundred thousand children and 74,000 mothers, Singh said, "What concerns me and what must concern all enlightened citizens is that 42% of our children are still underweight. This is an unacceptably high occurrence." There are nearly 160m children in India below six years. According to Singh, the health of the economy and society lies in the health of "this generation". (India is pitching itself to be a super power by 2020 .)
11 Trouble at the crease (Ramesh Thakur in Times of India) The disparity between China's and India's organisational abilities in the last Olympic and Commonwealth Games respectively is, if anything, exceeded by the disparity in their respective athletes' international performances. Probity and integrity. Discipline and training. Perseverance and application. Transparency in selection. Rewards based on results, not entitlement and cronyism. Strategic guidance based on a vision for the future. Just to list these attributes is enough to show the connection between sporting and governance performance. Indeed, the Board of Control for Cricket in India embodies most of the failings of governance in India in general, where money and power corrupt separately and corrupt completely when they intersect.
2 In Egypt, power still hinges on men (The New York Times) At first Samira Ibrahim was afraid to tell her father that Egyptian soldiers had detained her in Tahrir Square in Cairo, stripped off her clothes, and watched as she was forcibly subjected to a “virginity test.” But when her father, a religious conservative, saw electric prod marks on her body, they revived memories of his own detention and torture under President Hosni Mubarak’s government. “History is repeating itself,” he told her, and together they vowed to file a court case against the military rulers, to claim “my rights,” as Ms. Ibrahim later recalled. That case has proved successful so far. For the first time last month, an administrative court challenged the authority of the military council and banned such “tests.” But nearly a year after Mr Mubarak’s ouster, Ms. Ibrahim’s story in many ways illustrates the paradoxical position of women in the new Egypt. Emboldened by the revolution to claim a new voice in public life, many are finding that they are still dependent on the protection of men, and that their greatest power is not as direct actors but as symbols of the military government’s repression.
3 How TV newscasts are changing in the era of fragmented media (The New York Times) There was a time when each of the Big Three nightly newscasts on American television tended to open with the same story — the latest campaign speech, a new government study or perhaps a big snowstorm. That time is gone. Influenced by cable and the Internet, the nightly newscasts are shaking up conventions that stretch back 50 years, seeking to distinguish themselves by picking different stories and placing them in different orders. “The three evening newscasts have become more different from one another than at any time I can remember,” said Bill Wheatley, who worked at NBC News for 30 years and now teaches at Columbia. The differences provide a stark illustration of the state of the news media — much more fragmented than ever, but also arguably more creative. Viewers these days “make their own choices,” said Ben Sherwood, the president of ABC News. “They pick what matters most to them, and we are trying to be adaptive and responsive to those sweeping changes.”
4 Europe’s future in doubt, warns Fiat boss (The Guardian) Europe is "playing with fire" and its future is in doubt if it doesn't "get serious," the boss of the Italian car giant Fiat has warned, as ratings agency Fitch put Italy on notice of a credit downgrade. Sergio Marchionne, chief of Fiat and Chrysler, said the European debt crisis was likely to flatten his business for the next two years. Marchionne said: "One of the things we need to realise is that the world is fundamentally interconnected. We have ended up being accountable to a lot of people who financed our public debt.
Europe is being called to task to solve a number of issues. If we don't acquire the confidence of the financial markets, the future of Europe is doubtful." His strongly worded warning to Europe's politicians came as Fitch said Italy could see its A+ rating cut by the end of the month. Italy has seen its borrowing costs rise to eye-watering levels as confidence in the future of the single currency has been rocked. Yields on 10-year Italian bonds, which determine the interest rate Rome has to pay to borrow, stood at 7.14%. A rate of 7% is widely viewed as unsustainable and was the point at which Portugal, Greece and the Irish Republic were forced to seek a bailout.
5 Skyscrapers and financial crises (The Guardian) There is an "unhealthy correlation" between the building of skyscrapers and subsequent financial crashes, according to Barclays Capital. Examples include the Empire State building, built as the Great Depression was underway, and the current world's tallest, the Burj Khalifa, built just before Dubai almost went bust. China is currently the biggest builder of skyscrapers, the bank said. India also has 14 skyscrapers under construction.
The world's first skyscraper, the Equitable Life building in New York, was completed in 1873 and coincided with a five-year recession. It was demolished in 1912. Other examples include Chicago's Willis Tower (which was formerly known as the Sears Tower) in 1974, just as there was an oil shock and the US dollar's peg to gold was abandoned. And Malaysia's Petronas Towers in 1997, which coincided with the Asian financial crisis.
The findings might be a concern for Londoners, who are currently seeing the construction of what will be Western Europe's tallest building, the Shard. Investors should be most concerned about China, which is currently building 53% of all the tall buildings in the world, the bank said. In India, billionaire Mukesh Ambani built his own skyscraper in Mumbai - a 27-storey residence believed to be the world's most expensive home. "Today India has only two of the world's 276 skyscrapers over 240m in height, yet over the next five years it intends to complete 14 new skyscrapers," according to Barclays Capital.
6 Virtual shopping agent is round the corner (Gregory Roekens, Wunderman's UK chief technology officer, to BBC) I think 2012 will bring more "screenless" interfaces, like Apple's Siri. I want an interface where when I'm driving I can buy shopping by just speaking. Speech recognition has become amazingly good. It's an added interface that will be another tool for users.
What consumers will do in the future is empower a virtual assistant to do your weekly shopping for you, because it will know what you eat, your favourite stuff, what you're allergic to and so on. In the future we will empower our technology to make purchase decisions on our behalf. The question is, as marketers, who do you target, who do you communicate with? Is it the consumer? Or the automated agent?
7 Ten 100-year predictions that came true (BBC) In 1900, an American civil engineer, John Elfreth Watkins made a number of predictions about what the world would be like in 2000. How did he do? Here are 10 that he got right: 1. Digital colour photography 2. The rising height of Americans. "Americans will be taller by from one to two inches." 3. Mobile phones 4. Pre-prepared meals 5. Slowing population growth 6. Hothouse vegetables. “Winter will be turned into summer and night into day by the farmer”, said Watkins, “with electric wires under the soil and large gardens under glass.” 7. Television 8. Tanks "Huge forts on wheels will dash across open spaces at the speed of express trains of today." 9. Bigger fruit. "Strawberries as large as apples will be eaten by our great-great-grandchildren." 10. The Acela Express. "Trains will run two miles a minute normally. Express trains 150 miles per hour."
And four he didn’t get right: 1. No more C, X or Q. "There will be no C, X or Q in our everyday alphabet. They will be abandoned because unnecessary." 2. Everybody will walk 10 miles a day 3. No more cars in large cities 4. No mosquitoes or flies.
8 The Kodak moment passes (Mint) Reports indicate that the Eastman Kodak Company may file for bankruptcy soon. The company’s slow decline can be traced back to the 1980s when the company’s stranglehold on the US photographic film market came under attack from “upstarts” like Fujifilm. That gentle decline accelerated into a headlong tumble over a cliff when the company failed to respond to the emergence of cheap, mass-market digital cameras. Instead, it clung to hope that the vastly more profitable film market would sustain. It did not.
What did Kodak do wrong? Essentially, not a lot. This cliche will become more popular in the days to come, but Kodak truly was the Apple-like technology disruptor of its day. The company owns hundreds of technology patents and, ironically, even invented the digital camera in 1975. It was also a famously generous employer, paying employees well and rewarding with generous pensions. But while being good to people and fantastic with patents and technology, it made one grave error: Kodak assumed that it was strong enough to cope, if not determine, the speed at which the mass market adopted disruptions.
Companies that find themselves on pedestals today will do well to pay heed. It isn’t simply enough to invent, innovate or generate thousands of patents. The ability to invent must go hand in hand with an eye on the market. Or decline will be swift, and it is getting swifter. Kodak took 175 years to rise, peak and decline. MySpace took five.
9 No ‘kolaveri’ for corruption in India (Khaleej Times) Everyone has a studied opinion on Anna Hazare’s failure to stay the distance. There is a large school that is of the opinion Hazare turned smug and arrogant with the heady elixir of power and morphed from catalyst to cowboy. The biggest segment of the public that did not turn up for the next round of fasting pressure wasn’t just bored with it all, they just came to the conclusion that corruption was so deeply ingrained in the system that getting hyper about it was pointless…no Lokpal Bill was going to shoo it away. No great things are achieved without great effort and no one wanted to heave themselves to making it. One factor was the unspoken apathy of the public that could stir itself up to celebrate happy, silly verse like Kolaveri di with 40 million hits but unable to churn up anywhere near enough kolaveri to combat the blight that has eroded the body public for sixty odd years. Future imperfect triumphs.
There has to be a collective will to achieve an end. It wasn’t there. It is very clear that the Hazare chariot caught fire and lost a wheel because there was no Indian Spring and the winter of discontent simply sapped the will. Hazare got lost in the wilderness and no one wanted to rescue him. The Indian people failed to rise to the occasion, seeking salvation either in bad mouthing Hazare, ridiculing him or opting cynically to gild corruption as a long term resident in the nation. The public was happy to pass the buck and blame different factors, everything but themselves. After all, what can we do? The answer to that is simple. We can talk, we can write letters of moaning empathy, even wail about our own sloth in fighting the curse of corruption so far as no sacrifice is demanded of us. That is just it. Hazare lost because his army deserted him, a billion possible soldiers prematurely decided this was not their fight, that they had places to go, work to do, bills to pay, a life to run, and if a bit of that payment was under the table, so be it.
10 India PM says malnourishment a national shame (Times of India) Calling malnourishment "a national shame", Prime Minister Manmohan Singh said India cannot hope for a healthy future with 42% of children aged below five years being underweight. Releasing the Hungama survey that measured the nutrition status of more than one hundred thousand children and 74,000 mothers, Singh said, "What concerns me and what must concern all enlightened citizens is that 42% of our children are still underweight. This is an unacceptably high occurrence." There are nearly 160m children in India below six years. According to Singh, the health of the economy and society lies in the health of "this generation". (India is pitching itself to be a super power by 2020 .)
11 Trouble at the crease (Ramesh Thakur in Times of India) The disparity between China's and India's organisational abilities in the last Olympic and Commonwealth Games respectively is, if anything, exceeded by the disparity in their respective athletes' international performances. Probity and integrity. Discipline and training. Perseverance and application. Transparency in selection. Rewards based on results, not entitlement and cronyism. Strategic guidance based on a vision for the future. Just to list these attributes is enough to show the connection between sporting and governance performance. Indeed, the Board of Control for Cricket in India embodies most of the failings of governance in India in general, where money and power corrupt separately and corrupt completely when they intersect.
Wednesday, January 4, 2012
Kodak faces bankruptcy; End of Keynesian era; Flamingo slaughter in India; Another atrocity in Kashmir; Ambani magic; Stock market blow for India Inc
1 The BBC on Eastman Kodak facing bankruptcy. Shares in Eastman Kodak have fallen 28% on speculation the photography firm was preparing to file for bankruptcy protection in the US. The sell-off was triggered by a report in the Wall Street Journal alleging Kodak was preparing a Chapter 11 filing after struggling to sell key assets. The company said it was going to explore selling or licensing around 1,100 of its digital imaging patents - roughly 10% of its total library. Kodak may file for Chapter 11 either this month or in early February, the WSJ claimed, adding that the company would continue to pay its bills and operate normally if went in bankruptcy protection. The 131-year-old firm has been squeezed by weaker sales of consumer products and the heavy cost base of its operations and employees around the globe. In the third quarter of 2011, the company reported a three-month loss of $222m, its ninth quarterly loss in three years. However, despite the problems, Kodak does have assets that could point to a more viable future. Analysts said the patents could fetch between $2bn and $3bn if the company can find the right buyer.
2 Al Jazeera on the decline of the American empire. The US has the world's biggest economy, the most influential culture, and the most potent military machine, with a budget that equals that of all other nations combined. It is the only power with a global project defended and supported by more aircraft carriers, Fortune 500 companies, and more successful media-tainment conglomerates than any other. But the last decade has been problematic for the world's only superpower. America's post-Cold War optimism has given way to pessimism, forecasting a declining power and more crucially, the end of "the American era". The rise of new regional and global powers, coupled with Washington's recent war fiascos and financial crisis have worsened the outlook for the future of the US.
3 Nathan Lewis in Al Jazeera on the end of the Keynesian era. Today, governments have not really followed the hole-digging-and-filling routine of mid-century Keynesianism. However, the idea that the government will attempt to fix private-sector problems with the expenditure of vast quantities of public money remains. So far, this has taken the form primarily of filling the financial holes in bank balance sheets, so that private investors will not take a loss on their earlier poor decisions. To do so, governments have dug huge holes in the public balance sheets. Several countries - Greece, Spain, Italy, Portugal and Ireland - have already reached the point where they would have defaulted if left to the private markets. The notion of spending your way to prosperity has run into the brick wall of default.
This has made the Keynesians even more reliant upon their second trick, which is some form of "easy money" policy. Today, this has reached a degree that is unprecedented in the last century. The United States, the United Kingdom and Japan have adopted "zero interest rate" policies, and on top of that, they have undertaken aggressive "quantitative easing" policies. The result of this hyper-aggressive Keynesianism is that the values of currencies around the world have steadily declined over the past 10 years. I expect we will have our Keynesian crisis, in which several more governments, including the US, either default, or print money to avoid a default. Currency values will probably continue to decline, perhaps not so gradually as has been the case thus far. Eventually, governments will be incapable of either borrowing or devaluing their way out of their problems. Then what? If Keynesianism amounts to can-kicking, a better approach would be to address the fundamental problems that are causing the crisis in the first place, and to improve economic conditions in a broad sense.
Keynesians have always hated the gold standard, because it prevents them from engaging in one of their favourite pastimes, currency jiggering. By the end of our crisis, we will probably see a worldwide rejection of Keynesian funny money ideology. People will want to return to the stable money principles of the gold standard era. Today, government default, bank insolvency, and depreciating currencies plague our economic environment. Humans seem to learn slowly, and only with great pain and struggle. Eventually, I expect the crisis to get so bad that all attempts to maintain the status quo will disintegrate. However, this would be the first step toward a much brighter future. With banks that have been restructured to solvency without public funds and a world gold standard system, the post-Keynesian era should be a time of great prosperity.
4 The Wall Street Journal onThe Hindu rethinking its ad policy after an “atrocious” Sonia Gandhi ad was carried in the paper. The editor of the Hindu newspaper described an ad extolling Congress Party leader Sonia Gandhi as “atrocious” and said that in future it would not carry such ads on the front. The ad, placed by Tamil Nadu businessman and Congress politician H Vasanthakumar, told Mrs. Gandhi that her followers were “ever at your feet.” Readers who saw the ad appear to have complained to the Hindu editor, Siddharth Varadarajan, who posted this response on Facebook: “To all those who messaged me about the atrocious front page ad in The Hindu’s Delhi edition on Jan 1, my view as Editor is that this sort of crass commercialisation compromises the image and reputation of my newspaper,” said Varadarajan. “We are putting in place a policy to ensure the front page is not used for this sort of an ad again.”
Many readers praised the move, though some said it wasn’t the nature of the ad that had bothered them. “Thanks for your quick positive response. Looking at some of the other comments, I am not talking about the contents of that ad as such,” wrote Santhanam Vaidya. “I would like to see Hindu front page with topical headline news items, with right bottom quarter for an advt (the usual Hindu way). I do not want to see massive full page ad (be it Vasant or Volkswagon).”
5 The Times of India story on flamingo slaughter in Kutch, Gujarat. Wildlife experts and enthusiasts from around the world will congregate in the air-conditioned environs of Mahatma Mandir in Gandhinagar as part of the Global Bird Watcher's Conference on January 19. But it would make more sense if they met in the marshlands of Kutch and surrounding areas, which have become a graveyard of some of the most endangered winged species in the country - flamingos. Conservation activists have uncovered a major incident of poaching of lesser flamingos in the Little Rann of Kutch.
Last week, activist DV Girish of Bhadra Wildlife Conservation Trust of Bangalore was shocked when he found a large heap of white feathers in the wasteland near Velasar village in Maliya Miyana taluka in Rajkot. On closer inspection, he found 33 severed heads and legs of lesser flamingos. The torsos were missing, indicating that they had been killed for meat. The lesser flamingos are local migratory birds that flock to the region during winter months from the southern part of the country. Despite being the most populous species of flamingo, it is notified as near-threatened due to its declining population and depleting breeding sites. "I fear that this is not an isolated incident," Girish said.
6 The Hindu editorial on another atrocity in Kashmir. For no crime other than that he stood alongside a crowd demanding the restoration of electricity supply to his village, Altaf Ahmad Sood was shot dead on Monday. This appalling murder, at the hands of a Central Industrial Security Force picket guarding a power installation at Barnait, a village near Uri in Jammu and Kashmir, makes clear the casualness with which central forces reach for their guns against the people of Kashmir. In this case, multiple rounds were fired into the crowd, aimed to kill rather than to disperse the crowd. N.R. Das, the CISF chief, has said his men were “outnumbered” — a bizarre claim, given that there is no indication that the crowd was armed or seeking to attack the police.
The killing raises two issues that need to be addressed by New Delhi — not Srinagar. The first is the central government's dogged refusal to sanction the prosecution of central security force personnel facing credible allegations of murder in civilian courts, thus fostering a culture of impunity. Secondly, the central government's unwillingness to ensure security force accountability is rivaled only by its indifference to enhancing security force competencies. Even though tens of thousands of personnel have been recruited into the central and state security forces, they remain ill trained — and, inevitably, trigger happy.
7 ICICI chairman MV Kamath stating in Business Standard that stock markets are breaking India Inc’s back. In the minds of corporate India what is enveloping the gloom and negativity is the situation with the stock market. My feeling is only 20-25% investments, that were to happen, probably were throttled. But the impact on the feel-good sentiment is disproportionate, probably 50-60%. The stock market is at a level that is not giving corporates any leeway to do things that are needed. It is virtually breaking the back of corporate India.
8 The Financial Chronicle editorial, titled Ambani magic. Mukesh Ambani’s big deal with Raghav Bahl of the Network 18 group and a slew of smaller service/content providers over past year are signs that a Goliath is preparing ground for a mega communications foray in the telecom/broadband space, riding the cutting-edge 4G platform. Ambani Sr needs to be applauded for his foresight and 360-degree planning. In many ways, the current ICT strategy, and the earlier telecom foray when the original Reliance Infocomm mobile phone service was a Mukesh Ambani baby, reveal the grand scale of backward and forward integration originally made textbook case study by their father, the legendary Dhirubhai Ambani in the petroleum-petrochemicals-textile complex he set up in his lifetime to deliver mill-made cloth to consumers. So grand was Dhirubhai’s design of backward integration in its strategy and execution that it made the final brand Vimal and the final product, textiles, irrelevant in the consumer mind space.
Today, RIL is a global leader in the manufacture of polyester yarn and fibre and among the top producers of other major petrochemical products. History now appears to be repeating itself in the shape of Dhirubhai’s elder son delivering content, riding a giant technology pipeline. RIL is setting up a pan-India 4G broadband network that is likely to revolutionise several sectors as diverse as entertainment, information, education and healthcare. Ambani’s target is not just the 900 and odd million mobile phone subscribers, the biggest consumer base anywhere in the world, but also the 540 million-plus TV viewership that is influenced every minute in their buying and selling decisions. Instead of first erecting a 4G pipeline, Reliance is putting the several pieces of a giant information jigsaw in place to overwhelm the customer with voice and data choices. To pull a significant number of people, Reliance is said to be talking to device makers, infrastructure providers and content generators to create a complete ecosystem that would eventually install Ambani and his Reliance brand at the apex of the nation, guiding the destiny of 1.2 billion and more people, waiting to ride the technology boom to encash the demographic dividend.
2 Al Jazeera on the decline of the American empire. The US has the world's biggest economy, the most influential culture, and the most potent military machine, with a budget that equals that of all other nations combined. It is the only power with a global project defended and supported by more aircraft carriers, Fortune 500 companies, and more successful media-tainment conglomerates than any other. But the last decade has been problematic for the world's only superpower. America's post-Cold War optimism has given way to pessimism, forecasting a declining power and more crucially, the end of "the American era". The rise of new regional and global powers, coupled with Washington's recent war fiascos and financial crisis have worsened the outlook for the future of the US.
3 Nathan Lewis in Al Jazeera on the end of the Keynesian era. Today, governments have not really followed the hole-digging-and-filling routine of mid-century Keynesianism. However, the idea that the government will attempt to fix private-sector problems with the expenditure of vast quantities of public money remains. So far, this has taken the form primarily of filling the financial holes in bank balance sheets, so that private investors will not take a loss on their earlier poor decisions. To do so, governments have dug huge holes in the public balance sheets. Several countries - Greece, Spain, Italy, Portugal and Ireland - have already reached the point where they would have defaulted if left to the private markets. The notion of spending your way to prosperity has run into the brick wall of default.
This has made the Keynesians even more reliant upon their second trick, which is some form of "easy money" policy. Today, this has reached a degree that is unprecedented in the last century. The United States, the United Kingdom and Japan have adopted "zero interest rate" policies, and on top of that, they have undertaken aggressive "quantitative easing" policies. The result of this hyper-aggressive Keynesianism is that the values of currencies around the world have steadily declined over the past 10 years. I expect we will have our Keynesian crisis, in which several more governments, including the US, either default, or print money to avoid a default. Currency values will probably continue to decline, perhaps not so gradually as has been the case thus far. Eventually, governments will be incapable of either borrowing or devaluing their way out of their problems. Then what? If Keynesianism amounts to can-kicking, a better approach would be to address the fundamental problems that are causing the crisis in the first place, and to improve economic conditions in a broad sense.
Keynesians have always hated the gold standard, because it prevents them from engaging in one of their favourite pastimes, currency jiggering. By the end of our crisis, we will probably see a worldwide rejection of Keynesian funny money ideology. People will want to return to the stable money principles of the gold standard era. Today, government default, bank insolvency, and depreciating currencies plague our economic environment. Humans seem to learn slowly, and only with great pain and struggle. Eventually, I expect the crisis to get so bad that all attempts to maintain the status quo will disintegrate. However, this would be the first step toward a much brighter future. With banks that have been restructured to solvency without public funds and a world gold standard system, the post-Keynesian era should be a time of great prosperity.
4 The Wall Street Journal onThe Hindu rethinking its ad policy after an “atrocious” Sonia Gandhi ad was carried in the paper. The editor of the Hindu newspaper described an ad extolling Congress Party leader Sonia Gandhi as “atrocious” and said that in future it would not carry such ads on the front. The ad, placed by Tamil Nadu businessman and Congress politician H Vasanthakumar, told Mrs. Gandhi that her followers were “ever at your feet.” Readers who saw the ad appear to have complained to the Hindu editor, Siddharth Varadarajan, who posted this response on Facebook: “To all those who messaged me about the atrocious front page ad in The Hindu’s Delhi edition on Jan 1, my view as Editor is that this sort of crass commercialisation compromises the image and reputation of my newspaper,” said Varadarajan. “We are putting in place a policy to ensure the front page is not used for this sort of an ad again.”
Many readers praised the move, though some said it wasn’t the nature of the ad that had bothered them. “Thanks for your quick positive response. Looking at some of the other comments, I am not talking about the contents of that ad as such,” wrote Santhanam Vaidya. “I would like to see Hindu front page with topical headline news items, with right bottom quarter for an advt (the usual Hindu way). I do not want to see massive full page ad (be it Vasant or Volkswagon).”
5 The Times of India story on flamingo slaughter in Kutch, Gujarat. Wildlife experts and enthusiasts from around the world will congregate in the air-conditioned environs of Mahatma Mandir in Gandhinagar as part of the Global Bird Watcher's Conference on January 19. But it would make more sense if they met in the marshlands of Kutch and surrounding areas, which have become a graveyard of some of the most endangered winged species in the country - flamingos. Conservation activists have uncovered a major incident of poaching of lesser flamingos in the Little Rann of Kutch.
Last week, activist DV Girish of Bhadra Wildlife Conservation Trust of Bangalore was shocked when he found a large heap of white feathers in the wasteland near Velasar village in Maliya Miyana taluka in Rajkot. On closer inspection, he found 33 severed heads and legs of lesser flamingos. The torsos were missing, indicating that they had been killed for meat. The lesser flamingos are local migratory birds that flock to the region during winter months from the southern part of the country. Despite being the most populous species of flamingo, it is notified as near-threatened due to its declining population and depleting breeding sites. "I fear that this is not an isolated incident," Girish said.
6 The Hindu editorial on another atrocity in Kashmir. For no crime other than that he stood alongside a crowd demanding the restoration of electricity supply to his village, Altaf Ahmad Sood was shot dead on Monday. This appalling murder, at the hands of a Central Industrial Security Force picket guarding a power installation at Barnait, a village near Uri in Jammu and Kashmir, makes clear the casualness with which central forces reach for their guns against the people of Kashmir. In this case, multiple rounds were fired into the crowd, aimed to kill rather than to disperse the crowd. N.R. Das, the CISF chief, has said his men were “outnumbered” — a bizarre claim, given that there is no indication that the crowd was armed or seeking to attack the police.
The killing raises two issues that need to be addressed by New Delhi — not Srinagar. The first is the central government's dogged refusal to sanction the prosecution of central security force personnel facing credible allegations of murder in civilian courts, thus fostering a culture of impunity. Secondly, the central government's unwillingness to ensure security force accountability is rivaled only by its indifference to enhancing security force competencies. Even though tens of thousands of personnel have been recruited into the central and state security forces, they remain ill trained — and, inevitably, trigger happy.
7 ICICI chairman MV Kamath stating in Business Standard that stock markets are breaking India Inc’s back. In the minds of corporate India what is enveloping the gloom and negativity is the situation with the stock market. My feeling is only 20-25% investments, that were to happen, probably were throttled. But the impact on the feel-good sentiment is disproportionate, probably 50-60%. The stock market is at a level that is not giving corporates any leeway to do things that are needed. It is virtually breaking the back of corporate India.
8 The Financial Chronicle editorial, titled Ambani magic. Mukesh Ambani’s big deal with Raghav Bahl of the Network 18 group and a slew of smaller service/content providers over past year are signs that a Goliath is preparing ground for a mega communications foray in the telecom/broadband space, riding the cutting-edge 4G platform. Ambani Sr needs to be applauded for his foresight and 360-degree planning. In many ways, the current ICT strategy, and the earlier telecom foray when the original Reliance Infocomm mobile phone service was a Mukesh Ambani baby, reveal the grand scale of backward and forward integration originally made textbook case study by their father, the legendary Dhirubhai Ambani in the petroleum-petrochemicals-textile complex he set up in his lifetime to deliver mill-made cloth to consumers. So grand was Dhirubhai’s design of backward integration in its strategy and execution that it made the final brand Vimal and the final product, textiles, irrelevant in the consumer mind space.
Today, RIL is a global leader in the manufacture of polyester yarn and fibre and among the top producers of other major petrochemical products. History now appears to be repeating itself in the shape of Dhirubhai’s elder son delivering content, riding a giant technology pipeline. RIL is setting up a pan-India 4G broadband network that is likely to revolutionise several sectors as diverse as entertainment, information, education and healthcare. Ambani’s target is not just the 900 and odd million mobile phone subscribers, the biggest consumer base anywhere in the world, but also the 540 million-plus TV viewership that is influenced every minute in their buying and selling decisions. Instead of first erecting a 4G pipeline, Reliance is putting the several pieces of a giant information jigsaw in place to overwhelm the customer with voice and data choices. To pull a significant number of people, Reliance is said to be talking to device makers, infrastructure providers and content generators to create a complete ecosystem that would eventually install Ambani and his Reliance brand at the apex of the nation, guiding the destiny of 1.2 billion and more people, waiting to ride the technology boom to encash the demographic dividend.
Buffet fails to beat S&P 500; India's new ultra-cheap car; Iceland realty melts 65%; Pay cuts for Singapore leaders; Urban India drowns in excreta
1 San Francisco Chronicle reporting Warren Buffet could not beat S&P 500 for 2011. Warren Buffett, the billionaire investor who has highlighted his record of beating the market when stocks languish, oversaw a decline last year as the Standard & Poor's 500 index ended essentially unchanged. Buffett's Berkshire Hathaway slipped 4.7% in 2011. It was the second time since 1990 that the firm underperformed an S&P 500 that had either declined for the year or rose less than 5%. Berkshire gained about 17-fold in the 21-year period, while the index has nearly quadrupled. Buffett's personal holdings of Berkshire lost about $2 billion last year. In September, the 81-year-old Buffett initiated the first share-repurchase program in four decades as Berkshire's chief executive officer. On a quarterly average basis, the stock price slipped in the three months that ended Sept. 30 to its lowest level relative to book value in more than 20 years.
2 New York Times on the German president’s controversial call to a newspaper editor. A smouldering political scandal that could harm Chancellor Angela Merkel has flared anew when Germany’s biggest newspaper confirmed that the president, Christian Wulff, had made a menacing telephone call to its editor in an unsuccessful effort to snuff out a damaging news story. Wulff, a key ally of Merkel, left a voicemail message last month on the mobile phone of Kai Diekmann, editor of the newspaper, Bild, in which he spoke of a “war” if the newspaper disclosed an unusual personal loan that Mr. Wulff had received from the family of a German entrepreneur. Bild went ahead anyway, and the resulting scandal quickly consumed the news media and political classes, prompting calls for Wulff’s resignation.
The news of the president’s call to the editor, first reported by two rival German newspapers, Süddeutsche Zeitung and Frankfurter Allgemeine Sonntagszeitung, intensifies the political pressure on Wulff, who is widely judged to have handled the scandal poorly, providing vague and grudging explanations about the loan. The episode has embarrassed Merkel as she seeks to muster political capital to deal with the euro crisis. The post of president is largely ceremonial in Germany, but as head of state, he or she is also seen as the ultimate defender of the Constitution, in which freedom of the press is enshrined.
3 The New York Times on India’s new ultra cheap car. India has a new ultracheap small car. Well, sort of. The company that introduced it on Tuesday, Bajaj Auto, best known for making motorcycles and motorized three-wheeled rickshaws, does not even call its newest product, the RE60, a car. Bajaj prefers the generic term four wheeler. Executives say they have no plans to market it to average consumers. Instead, they are aiming for drivers of rickshaws, which are powered by motorcycle engines and operate as short-distance taxis in India. The company did not say how much the RE60 would cost when it hit showrooms this year. But a rickshaw costs about 120,000 rupees, or $2,200, and one auto analyst estimated that the RE60 would be priced 25% higher than that, or about $2,750. RE60 was widely anticipated as Bajaj’s answer to the Tata Nano. The Nano, which its maker Tata Motors introduced in 2009, was billed as a people’s car that would bring mobility to India’s masses. It sells for a list price of about $2,600. But the analyst, Hormazd Sorabjee, said the RE60 would pose no challenge to the Nano, which itself had attracted only a fraction of the buyers for which Tata had hoped because of production delays and safety concerns. Bajaj said the RE60, fitted with a one-cylinder, 200 cc engine, would deliver 35 kilometers per liter, or 82 miles per gallon, and have a top speed of 70 kilometers per hour, or 43 miles per hour.
4 The Guardian on house prices falling 65% in Iceland. Property prices in Ireland are in freefall, according to housing analysts, whose latest figures show that prices in Dublin have collapsed by 65% in five years and by 60% across the country. "There is no doubt the market is over-correcting," said Marian Finnegan, chief economist at the Sherry FitzGerald Group, with house prices now making it cheaper to buy than to rent. Finnegan said the biggest shock was the level of deflation in Dublin, which "defied logic to a certain extent". The new homes market was now "completely non-functional", she said. The woeful state of the market is in stark contrast to the frenzied buying and selling of the mid-2000s when property in Dublin was achieving higher prices per square metre than Manhattan. One 550 sq metre house called Walford, in the embassy belt of Ballsbridge in Dublin 4, was sold in 2005 for a record price of euro 58m – €23m more than the asking price.
5 The Straits Times on salary cuts for Singapore leaders. The committee to review ministers' salaries has recommended a pay cut of 37% for a minister at entry grade, and a cut of 36% for the prime minister, including the removal of pensions. The government intends to accept the committee's recommendations, the prime minister said in a letter to the committee. That means the salary of a minister at entry level will be cut to $1.1 million. This is down from the current actual salary which stood at $1.58 million in 2010. The prime minister's salary will also be adjusted to $2.2 million, down from the 2010 salary of $3.07 million. The president's annual salary will be cut by 51% to $1.54 million. For the most junior ministers, the starting pay at the entry-level MR4 grade is $935,000. The committee has also recommended that ministers' pensions be done away with. The basis of the pay cuts is a recommendation to change the formula used to peg ministers' salaries to top private sector pay. The current formula for the starting salary of a minister is based on the median income of the top eight earners in six professions, including banking and law, with a one-third discount.
6 The Wall Street Journal report on urban India drowning in its own excreta. If a new report is to be believed, India is swimming in its own sewage and turning its rivers into drains for its ever-expanding cities. The Center for Science and Environment, a 22-year-old New Delhi-based advocacy and research organization, has just released its seventh report—this one entitled, “Excreta Matters: How urban India is soaking up water, polluting rivers and drowning in its own excreta.” The two volume report, which took three and a half years to research and write, includes surveys of water and wastewater management of 71 cities in India, editor Souparno Banerjee said.
“Every city was the same old story—it had devastated its surface water, it was depleting its ground water and it had no plan for managing its water or wastewater,” Banerjee said. As a result of neglect and bad planning, many cities have turned their rivers into drains, and the citizens who live around them no longer remember that they were once pristine sources of water, Banerjee says. The Budha Nullah in Ludhiana was once a darya, or river, says Sunita Narain, the director general of the research and advocacy organization, in the preface to the report. The most damning conclusion Narain’s team reaches about India’s water and wastewater management, is “the complete lack of data, research and understanding on this issue in the country.”
Narain suggests perhaps the ignorance is willful. “Is it a reflection of the caste system of Indian society, where removing waste was someone else’s business? The business was untouchable. Certainly it was unspeakable. Or is it a reflection of the current governance systems, where water and waste are government business and, within that, it is the sole business of a lowly water and sanitation bureaucracy?” “Or is it simply a reflection of Indian society’s extreme arrogance—our belief we can fix it all as and when we get rich?”
7 The Times of India on Indian embassy’s advisory to business houses to avoid doing business in China’s Yiwu city. India on Tuesday reacted sharply at China's failure to provide basic level of protection to a diplomat who was roughed up by hooligans inside a Chinese court and the illegal detention of two Indians by a bunch of local traders. The Indian embassy in China has asked Indian businesses to avoid transaction in the city of Yiwu, regarded as the world's biggest commodities market, after local authorities failed to stop the manhandling of a diplomat S Balachandran and did nothing to free two hostages held for a fortnight by Chinese traders. Indian officials said efforts were on to bring them to Shanghai to ensure their safety.
8 Former federal minister and Jammu & Kashmir governor Jagmohan writing in Deccan Chronicle on India’s darkling plain. The conflicts and controversies over the institution of Lokpal remind me of the lines of poet Mathew Arnold: “And we are here as on a darkling plain/Swept with confused alarms of struggle and flight/Where ignorant armies clash by night.” I wonder whether all the fretting and fuming reflect anything other than the clash of ignorant groups who remain in the dark about the underlying reality of the degraded mindscape of India and its polluted environment.
Beginning from the jeep scandal of 1949, there has been a virtual flood of cases of scams and scandals. The 2G spectrum scam broke all records of malfeasance; the Commonwealth Games, meant to enhance the global standing of the country, left a huge dent in its reputation after consuming about 18,000 crore of the national exchequer; the Bellary mines case has resulted in the swindling of public revenues on a massive scale. Even the statutory institutions, supposed citadels of fairness, such as Public Service Commissions, have fallen prey to corrupt practices. Two chairmen of the commission, one of Punjab and other of Maharashtra, were prosecuted. The Army, too, has not remained untainted. Even the media, the so-called custodian of clean public life, has started the unethical practice of “paid news”. The latest report of the Global Financial Integrity puts the estimates of the Indian wealth stashed abroad at $1.4 trillion.
My own long experience of dealing with political as well as bureaucratic functionaries has reinforced my belief that as long as the Indian mind is not reformed, no administrative, economic or constitutional reforms would save the country from the ever-deepening quagmire of inefficiency, corruption and malpractices. The experience of 65 years of Independence has shown that it is not possible to build a clean and honest system of governance on a diseased mindscape in the degraded milieu which such a mindscape gives rise to.
History tells us that every turning point in the march of civilisation has been preceded by a fundamental change in the mindscape of the people as in the case of the European renaissance in the mid-15th century. It was such inner change that was most needed in the post-1947 India, and it was this very pivotal need that was neglected by the builders of our nation.
9 Business Standard piece on Kerala facing labour shortage despite high wages. At the end of 2011, the minimum daily wage of a skilled worker in Kerala stood at Rs 450, up from Rs 350 in the previous year. This increase is owed to the huge demand-supply gap on various labour fronts, says industry. The daily wage of a mason, who builds the basement of houses and small and medium buildings with rock, edged up to Rs 700 per day. Also, a bus driver now gets Rs 650 and conductors Rs 550-600. The highest statutory wage fixed by the state government is Rs 351.39 for river sand collection and for its loading and unloading. The wage fixed for agricultural labourer is Rs 200. Nationally, this varies from Rs 156 -232 according to the area and is effective from October, 2011.
However, even at this high rate of wage, the state is facing an acute shortage of labour. The average daily wage of an unskilled worker now is Rs 400 and for women workers this is Rs 350. Of late, Kerala is also seeing a good flow of workers, both skilled and unskilled, from states like Orissa, Bihar, Assam, Bengal, Uttar Pradesh, Andhra Pradesh and Tamil Nadu. J Poulose, a construction contractor, gives advance payment to his workers for ensuring regular work at his sites. KU James, a former hotel owner says he has closed down his hotel just because of the labour shortage. “We are ready to give whatever they demand, but we were not getting workers for 2-3 months,” he says.
10 Business Standard on big economies facing $ 7.6trn debt in 2012. Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs. Led by Japan’s $3 trillion and the US’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows. The International Monetary Fund cut its forecast for growth this year to four per cent from a prior estimate of 4.5% as Europe’s debt crisis spreads, the US struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.
11 Mint reporting that India’s port expansion plan is likely to miss target. India is likely to miss the target of increasing the capacity of major ports as the government has awarded only one out of 23 proposed projects, according to two senior shipping ministry officials. The government had identified 23 port projects for the current fiscal year to increase the capacity of ports in India by 236.63 million tonnes (mt) a year with an estimated investment of Rs167bn, according to Maritime Agenda 2010-20, a shipping ministry plan for the development of the maritime sector. The country’s major ports play a key role in facilitating external trade, which accounts for 40% of India’s gross domestic product (GDP).
2 New York Times on the German president’s controversial call to a newspaper editor. A smouldering political scandal that could harm Chancellor Angela Merkel has flared anew when Germany’s biggest newspaper confirmed that the president, Christian Wulff, had made a menacing telephone call to its editor in an unsuccessful effort to snuff out a damaging news story. Wulff, a key ally of Merkel, left a voicemail message last month on the mobile phone of Kai Diekmann, editor of the newspaper, Bild, in which he spoke of a “war” if the newspaper disclosed an unusual personal loan that Mr. Wulff had received from the family of a German entrepreneur. Bild went ahead anyway, and the resulting scandal quickly consumed the news media and political classes, prompting calls for Wulff’s resignation.
The news of the president’s call to the editor, first reported by two rival German newspapers, Süddeutsche Zeitung and Frankfurter Allgemeine Sonntagszeitung, intensifies the political pressure on Wulff, who is widely judged to have handled the scandal poorly, providing vague and grudging explanations about the loan. The episode has embarrassed Merkel as she seeks to muster political capital to deal with the euro crisis. The post of president is largely ceremonial in Germany, but as head of state, he or she is also seen as the ultimate defender of the Constitution, in which freedom of the press is enshrined.
3 The New York Times on India’s new ultra cheap car. India has a new ultracheap small car. Well, sort of. The company that introduced it on Tuesday, Bajaj Auto, best known for making motorcycles and motorized three-wheeled rickshaws, does not even call its newest product, the RE60, a car. Bajaj prefers the generic term four wheeler. Executives say they have no plans to market it to average consumers. Instead, they are aiming for drivers of rickshaws, which are powered by motorcycle engines and operate as short-distance taxis in India. The company did not say how much the RE60 would cost when it hit showrooms this year. But a rickshaw costs about 120,000 rupees, or $2,200, and one auto analyst estimated that the RE60 would be priced 25% higher than that, or about $2,750. RE60 was widely anticipated as Bajaj’s answer to the Tata Nano. The Nano, which its maker Tata Motors introduced in 2009, was billed as a people’s car that would bring mobility to India’s masses. It sells for a list price of about $2,600. But the analyst, Hormazd Sorabjee, said the RE60 would pose no challenge to the Nano, which itself had attracted only a fraction of the buyers for which Tata had hoped because of production delays and safety concerns. Bajaj said the RE60, fitted with a one-cylinder, 200 cc engine, would deliver 35 kilometers per liter, or 82 miles per gallon, and have a top speed of 70 kilometers per hour, or 43 miles per hour.
4 The Guardian on house prices falling 65% in Iceland. Property prices in Ireland are in freefall, according to housing analysts, whose latest figures show that prices in Dublin have collapsed by 65% in five years and by 60% across the country. "There is no doubt the market is over-correcting," said Marian Finnegan, chief economist at the Sherry FitzGerald Group, with house prices now making it cheaper to buy than to rent. Finnegan said the biggest shock was the level of deflation in Dublin, which "defied logic to a certain extent". The new homes market was now "completely non-functional", she said. The woeful state of the market is in stark contrast to the frenzied buying and selling of the mid-2000s when property in Dublin was achieving higher prices per square metre than Manhattan. One 550 sq metre house called Walford, in the embassy belt of Ballsbridge in Dublin 4, was sold in 2005 for a record price of euro 58m – €23m more than the asking price.
5 The Straits Times on salary cuts for Singapore leaders. The committee to review ministers' salaries has recommended a pay cut of 37% for a minister at entry grade, and a cut of 36% for the prime minister, including the removal of pensions. The government intends to accept the committee's recommendations, the prime minister said in a letter to the committee. That means the salary of a minister at entry level will be cut to $1.1 million. This is down from the current actual salary which stood at $1.58 million in 2010. The prime minister's salary will also be adjusted to $2.2 million, down from the 2010 salary of $3.07 million. The president's annual salary will be cut by 51% to $1.54 million. For the most junior ministers, the starting pay at the entry-level MR4 grade is $935,000. The committee has also recommended that ministers' pensions be done away with. The basis of the pay cuts is a recommendation to change the formula used to peg ministers' salaries to top private sector pay. The current formula for the starting salary of a minister is based on the median income of the top eight earners in six professions, including banking and law, with a one-third discount.
6 The Wall Street Journal report on urban India drowning in its own excreta. If a new report is to be believed, India is swimming in its own sewage and turning its rivers into drains for its ever-expanding cities. The Center for Science and Environment, a 22-year-old New Delhi-based advocacy and research organization, has just released its seventh report—this one entitled, “Excreta Matters: How urban India is soaking up water, polluting rivers and drowning in its own excreta.” The two volume report, which took three and a half years to research and write, includes surveys of water and wastewater management of 71 cities in India, editor Souparno Banerjee said.
“Every city was the same old story—it had devastated its surface water, it was depleting its ground water and it had no plan for managing its water or wastewater,” Banerjee said. As a result of neglect and bad planning, many cities have turned their rivers into drains, and the citizens who live around them no longer remember that they were once pristine sources of water, Banerjee says. The Budha Nullah in Ludhiana was once a darya, or river, says Sunita Narain, the director general of the research and advocacy organization, in the preface to the report. The most damning conclusion Narain’s team reaches about India’s water and wastewater management, is “the complete lack of data, research and understanding on this issue in the country.”
Narain suggests perhaps the ignorance is willful. “Is it a reflection of the caste system of Indian society, where removing waste was someone else’s business? The business was untouchable. Certainly it was unspeakable. Or is it a reflection of the current governance systems, where water and waste are government business and, within that, it is the sole business of a lowly water and sanitation bureaucracy?” “Or is it simply a reflection of Indian society’s extreme arrogance—our belief we can fix it all as and when we get rich?”
7 The Times of India on Indian embassy’s advisory to business houses to avoid doing business in China’s Yiwu city. India on Tuesday reacted sharply at China's failure to provide basic level of protection to a diplomat who was roughed up by hooligans inside a Chinese court and the illegal detention of two Indians by a bunch of local traders. The Indian embassy in China has asked Indian businesses to avoid transaction in the city of Yiwu, regarded as the world's biggest commodities market, after local authorities failed to stop the manhandling of a diplomat S Balachandran and did nothing to free two hostages held for a fortnight by Chinese traders. Indian officials said efforts were on to bring them to Shanghai to ensure their safety.
8 Former federal minister and Jammu & Kashmir governor Jagmohan writing in Deccan Chronicle on India’s darkling plain. The conflicts and controversies over the institution of Lokpal remind me of the lines of poet Mathew Arnold: “And we are here as on a darkling plain/Swept with confused alarms of struggle and flight/Where ignorant armies clash by night.” I wonder whether all the fretting and fuming reflect anything other than the clash of ignorant groups who remain in the dark about the underlying reality of the degraded mindscape of India and its polluted environment.
Beginning from the jeep scandal of 1949, there has been a virtual flood of cases of scams and scandals. The 2G spectrum scam broke all records of malfeasance; the Commonwealth Games, meant to enhance the global standing of the country, left a huge dent in its reputation after consuming about 18,000 crore of the national exchequer; the Bellary mines case has resulted in the swindling of public revenues on a massive scale. Even the statutory institutions, supposed citadels of fairness, such as Public Service Commissions, have fallen prey to corrupt practices. Two chairmen of the commission, one of Punjab and other of Maharashtra, were prosecuted. The Army, too, has not remained untainted. Even the media, the so-called custodian of clean public life, has started the unethical practice of “paid news”. The latest report of the Global Financial Integrity puts the estimates of the Indian wealth stashed abroad at $1.4 trillion.
My own long experience of dealing with political as well as bureaucratic functionaries has reinforced my belief that as long as the Indian mind is not reformed, no administrative, economic or constitutional reforms would save the country from the ever-deepening quagmire of inefficiency, corruption and malpractices. The experience of 65 years of Independence has shown that it is not possible to build a clean and honest system of governance on a diseased mindscape in the degraded milieu which such a mindscape gives rise to.
History tells us that every turning point in the march of civilisation has been preceded by a fundamental change in the mindscape of the people as in the case of the European renaissance in the mid-15th century. It was such inner change that was most needed in the post-1947 India, and it was this very pivotal need that was neglected by the builders of our nation.
9 Business Standard piece on Kerala facing labour shortage despite high wages. At the end of 2011, the minimum daily wage of a skilled worker in Kerala stood at Rs 450, up from Rs 350 in the previous year. This increase is owed to the huge demand-supply gap on various labour fronts, says industry. The daily wage of a mason, who builds the basement of houses and small and medium buildings with rock, edged up to Rs 700 per day. Also, a bus driver now gets Rs 650 and conductors Rs 550-600. The highest statutory wage fixed by the state government is Rs 351.39 for river sand collection and for its loading and unloading. The wage fixed for agricultural labourer is Rs 200. Nationally, this varies from Rs 156 -232 according to the area and is effective from October, 2011.
However, even at this high rate of wage, the state is facing an acute shortage of labour. The average daily wage of an unskilled worker now is Rs 400 and for women workers this is Rs 350. Of late, Kerala is also seeing a good flow of workers, both skilled and unskilled, from states like Orissa, Bihar, Assam, Bengal, Uttar Pradesh, Andhra Pradesh and Tamil Nadu. J Poulose, a construction contractor, gives advance payment to his workers for ensuring regular work at his sites. KU James, a former hotel owner says he has closed down his hotel just because of the labour shortage. “We are ready to give whatever they demand, but we were not getting workers for 2-3 months,” he says.
10 Business Standard on big economies facing $ 7.6trn debt in 2012. Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs. Led by Japan’s $3 trillion and the US’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows. The International Monetary Fund cut its forecast for growth this year to four per cent from a prior estimate of 4.5% as Europe’s debt crisis spreads, the US struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.
11 Mint reporting that India’s port expansion plan is likely to miss target. India is likely to miss the target of increasing the capacity of major ports as the government has awarded only one out of 23 proposed projects, according to two senior shipping ministry officials. The government had identified 23 port projects for the current fiscal year to increase the capacity of ports in India by 236.63 million tonnes (mt) a year with an estimated investment of Rs167bn, according to Maritime Agenda 2010-20, a shipping ministry plan for the development of the maritime sector. The country’s major ports play a key role in facilitating external trade, which accounts for 40% of India’s gross domestic product (GDP).
Tuesday, January 3, 2012
Storm over right to work; None understands debt; Palmisano mantras; Japan's 'mancession'; India is junk-mail capital; Why India is riskier than China
1 The New York Times on the gathering storm over right to work. Nearly a year after Wisconsin and several other Republican-dominated states curbed the power of public sector unions, lawmakers are now turning their sights toward private sector unions, setting up what is sure to be another political storm. The thunderclouds are gathering first in Indiana. The leaders of the Republican-controlled Legislature say that when the legislative session opens on Wednesday, their No. 1 priority will be to push through a business-friendly piece of legislation known as a right-to-work law. Right-to-work laws prohibit union contracts at private sector workplaces from requiring employees to pay any dues or other fees to the union. Many right-to-work supporters say it is morally wrong to force unwilling workers to contribute to unions, while opponents argue that it is wrong to allow “free riders” not to support the unions that represent them in negotiations and arbitrations. Right-to-work is also a potent political symbol that carries serious financial consequences for unions. Corporations view such laws as an important sign that a state has policies friendly to business. Labour leaders say that allowing workers to opt out of paying any money to the union that represents them weakens unions’ finances, bargaining clout and political power.
2 Paul Krugman insisting nobody understands debt, in The New York Times. When people in D.C. talk about deficits and debt, by and large they have no idea what they’re talking about — and the people who talk the most understand the least. For while debt can be a problem, the way our politicians and pundits think about debt is all wrong, and exaggerates the problem’s size. Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.
This is, however, a really bad analogy in at least two ways. First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; US debt is, to a large extent, money we owe to ourselves. It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of US claims on foreigners. And because foreigners tend to put their US investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction. So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.
3 The New York Times on IBM and its CEO until last week, Samuel Palmisano. Because it has become so consistently successful, IBM is almost boring. This is a company so predictable that its financial forecast is packaged as a “five-year road map” as if it were some sort of state planning exercise. A large portion of the credit goes to Samuel J Palmisano, who stepped down on Sunday after nearly a decade as chief executive. During his tenure, IBM has been a textbook case of how to drive change in a big company — when so much of the study of business innovation focuses on start-ups and entrepreneurs.
He says his guiding framework boils down to four questions: 1. “Why would someone spend their money with you — so what is unique about you?” 2. “Why would somebody work for you?” 3. “Why would society allow you to operate in their defined geography — their country?” 4. “And why would somebody invest their money with you?” Palmisano formulated those questions in the months after he became CEO in March 2002. The four questions, he explains, were a way to focus thinking and prod the company beyond its comfort zone and to make IBM pre-eminent again. He presented the four-question framework to the company’s top 300 managers at a meeting in early 2003. “This needs to be our mission and goal, to make IBM a great company,” he said.
4 The Guardian on Zimbabwean workers complaining of Chinese abuse. Zimbabwe’s national defence college is under construction within a sprawling, heavily-guarded compound whose brooding presence sends a clear message to any would-be revolutionary. The construction site north of Harare has also become the lightning rod for another source of simmering resentment – Chinese labour practices. Surrounded by a perimeter wall that runs for a kilometre through what was once farmland, the shadowy military academy is being built by a Chinese contractor whose managers are accused of meting out physical punishments, miserable conditions and meagre pay.
"The beatings happen very often," said a 28-year-old carpenter, wearing blue overalls as he made the long walk home after a 14-hour shift. "They ill-treat you and, if you make a mistake, they beat you up. The Zimbabweans and Chinese rarely mix, he added. "They don't speak English so we use sign language. The Chinese eat off plates, then give us the leftovers." A 26-year-old builder, on his way to a nightshift, said: "We tried to go on strike but the leader of it was beaten up and sacked. The government doesn't say anything, even though it knows people are beaten up. I saw them undress some workers and beat them with helmets. Some of them were crying with the pain. "We feel angry but we need money, so there is no choice. If you don't work 10 hours, there is no money."
China’s commercial empire has expanded enormously in Africa over the past decade and Zimbabwe is trying to catch up. Trade between the two countries stood at $550m last year, according to the Chinese embassy. The government in Harare has announced that China plans up to $10bn in investments over the next five years, more than in any other country. Diamonds and other mineral resources are the main attraction, but Chinese entrepreneurs have also seized opportunities in construction, manufacturing and retail.
5 The Guardian on a Saudi law to have only females work in lingerie stores. Saudi Arabia will begin enforcing a law that allows only females to work in lingerie and apparel stores, despite disapproval from the country's top cleric. The 2006 law banning men from working in female apparel and cosmetic stores has not been implemented up to now, partly because of view of hardliners in the religious establishment, who oppose the idea of women working where men and women congregate together. Saudi women – tired of dealing with men when buying underwear – have boycotted lingerie stores to pressure owners to employ women. Law enforcement starts on Thursday.
The kingdom's religious police enforce Saudi Arabia's strict interpretation of Islam, which prohibits unrelated men and women from mingling. Women and men in Saudi Arabia remain highly segregated and are restricted in how they are allowed to mix in public. The separation of men and women is not absolute. Women in Saudi Arabia hold high-level teaching positions in universities and work as engineers, doctors, nurses and a range of other posts.
6 The San Francisco Chronicle on a girl with a funny talent. Some people can wiggle their ears. Others can cross their eyes or whistle like a bird. And then there’s a girl named Sarah whose funny talent is especially entertaining—and unique. The 13-year-old from Sydney, Australia, can make her eyebrows dance. Sarah, whose last name and back story are unknown, posted a video of herself performing impressive eyebrow dance moves to music last week and became an Internet sensation in a matter of days. Her YouTube video, “Girl with a Funny Talent,” has been viewed more than 7 million times.
7 The San Francisco Chronicle on Japan’s ‘mancession’. Three times a week, Seiya Ogawa bikes to an unemployment center in Kadoma, home to Panasonic Corp., looking for work to help pay for his son's final year at college. "At this point, I'm willing to take any job," said the 49-year-old, who assembled electronic circuit boards in what was once a bustling manufacturing suburb of Osaka, Japan's third-largest city. This month, it's officially one year since he first signed on at the center, and "it's like my humanity's been stripped from me," he said.
Ogawa and his son rely on the incomes of his wife and daughter, a social role reversal that is spreading in Japan as factories and building companies fire workers and services that hire mostly women add employees. The increasing burden as breadwinners also gives women less incentive to marry and have children early in a country that already has the fastest-aging population in the developed world.
8 The BBC on Saudi Arabia’s huge budget surplus. Saudi Arabia has posted an $81.6bn budget surplus for 2011 as its income beat forecasts by more than double, official figures suggest. Revenues grew to $296bn, although ministers had forecast $144bn, said the Saudi Arabian finance ministry. The country plans to reduce spending in 2012 to $184bn after officials said they expect the surplus fall to just $3bn next year. Analysts however, see this as another conservative forecast. Most of the growth in revenue was driven by oil production which accounts for around 90% of the country's exports.
9 The BBC on Nikkei being at its lowest year-end level since 1982. Japan's main share index has closed at its lowest end-of-year level since 1982. The Nikkei 225 index finished last Friday up 0.7% to 8,455.35. Stocks have been hit by a weak global economy, as well as a devastating earthquake and tsunami on 16 March that left 20,000 people dead or missing and sparked a nuclear crisis. Shares have lost a fifth of their value this year, with the majority of losses in the two days following the disaster. The disaster severely disrupted manufacturing at carmakers such as Toyota and electronics firms such as Sony. Shares in Tepco, the owner of the Fukushima nuclear power plant that became the focus of an effort to prevent a meltdown, dropped 91% this year.
10 The Johannesburg Times on an Afghan girl rescued from torture by her in-laws and likely to be sent to India for treatment. An Afghan official says a 15-year-old girl severely tortured for months by her in-laws who wanted to force her into prostitution will be sent to India for medical treatment. Interior Ministry spokesman Sediq Sediqi said Sahar Gul's mother-in-law and sister-in-law were arrested and her husband was being sought. Gul was brutally tortured, beaten and locked in a toilet by her husband’s family for months after she refused to become a prostitute. She was in critical condition when she was rescued from a house in northern Baghlan province last week, after her neighbours reported hearing Gul crying and moaning in pain. According to police in Baghlan, her in-laws pulled out her nails and hair, and locked her in a dark basement bathroom for about five months, with barely enough food and water to survive.
11 Khaleej Times on India being a junk-mail country. India has emerged as the world’s top source of junk mail as spammers make use of lax laws and absent enforcement to turn the country into a centre of unsolicited email. A recent report by Kaspersky Lab, a Moscow-based global Internet security firm, says more spam was sent from the south Asian giant than anywhere else in the world in the third quarter of the year. An average of 79.8% of email traffic in the three months to the end of September was junk. Of that, 14.8% originated in India, 10.6% came from Indonesia, and 9.7% from Brazil. Vijay Mukhi, an Internet security specialist in India’s financial capital, Mumbai, said spammers, forced to look for new bases after other countries cracked down on the practice, can act with impunity in India. ‘We have an Information Technology Act that was introduced in 2000. But we don’t have any convictions under it and it’s silent on spam,’ he told AFP. ‘If I’m a spammer, I would rather spam from India to India and the rest of world because nothing will happen to me.’ India’s booming mobile phone sector, which has recently seen the introduction of third-generation smart phones, also provides a potential open door for spam and malware (malicious software), industry figures say.
12 The Dawn on a Muslim revolt in China after a mosque was torn down. Hundreds of Muslims fought with armed police who demolished a mosque in north China, local police and a human rights group said on Monday, with several people injured in the “riot”. The violence between local Muslims and roughly 1,000 armed police began after police declared illegal a newly renovated mosque in the Ningxia Hui Autonomous Region and moved to destroy it, the Information Center for Human Rights and Democracy, in Hong Kong, said. The Hui are one of several Muslim minority groups in China. A policeman surnamed Ma confirmed that the mosque was torn down. He told AFP a “riot” occurred in Hexi on Saturday afternoon.
13 The Wall Street Journal on power problems threatening India’s growth. Almost a decade ago, India's government, seeking to overcome one of the biggest challenges to the nation's development, set an ambitious goal: electric power for all by 2012. Instead, as the target date of March nears, the power sector is in shambles, and its dire state threatens India's economic prospects at a time when a high inflation rate, a burgeoning government budget deficit and ripples from the European financial crisis are already damping growth. India is the world's fifth-largest electricity producer after the US, China, Japan and Russia, but its per capita consumption is among the world's lowest, at 778.71 kilowatt hours a year. Almost 300 million people don't have access to electricity. The country needs a huge jump in supply to sustain its rapid economic growth, fight poverty and light the homes of those powerless millions.
More than half of India's installed electricity-generating capacity of 182 gigawatts is coal-based, and a large chunk of future power projects also will run on coal. By comparison, China's installed capacity at the end of 2010 was 962 gigawatts, about 73% of it from coal. India's coal sector is hampered by primitive mining techniques and rife with theft and corruption; the monopoly coal producer, state-controlled Coal India, has consistently missed production targets. Shoddy transport infrastructure, inadequate for moving coal from far-flung mines to where it is needed, compounds the problems. "The situation is extremely challenging considering the fact that billions of dollars have been invested in building power plants but they can't be used to produce power due to non-availability of coal," said Ravi Sharma, chief executive of Adani Power.
14 Stephen Roach holding forth in The Financial Express on why India is riskier than China. Today, fears are growing that China and India are about to be the next victims of the ongoing global economic carnage. This would have enormous consequences. Asia’s developing and newly industrialized economies grew at an 8.5% average annual rate over 2010-11 -- nearly triple the 3% growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession. In one important sense, these concerns are understandable: both economies depend heavily on the broader global climate. China is sensitive to downside risks to external demand -- more relevant than ever since crisis-torn Europe and the US collectively accounted for 38% of total exports in 2010. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets. Yet fears of hard landings for both economies are overblown, especially regarding China.
It is a serious exaggeration to claim, as many do today, that the Chinese economy is one massive real estate bubble. Yes, total fixed investment is approaching an unprecedented 50% of GDP, but residential and non-residential real estate, combined, accounts for only 15-20% of that -- no more than 10% of the overall economy. In terms of floor space, residential construction accounts for half of China’s real estate investment. Identifying the share of residential real estate that goes to private developers in the dozen or so first-tier cities suggests that less than 1% of GDP would be at risk in the event of a housing market collapse -- not exactly a recipe for a hard landing.
India is more problematic. As the only economy in Asia with a current account deficit, its external funding problems can hardly be taken lightly. Like China, India’s economic growth momentum is ebbing. But unlike China, the downshift is more pronounced -- GDP growth fell through the 7% threshold in the third calendar year quarter of 2011, and annual industrial output actually fell by 5.1% in October. But the real problem is that, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means that the Reserve Bank of India can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of around 9% of GDP limits India’s fiscal-policy discretion. While China is in better shape than India, neither economy is likely to implode on its own. It would take another shock to trigger a hard landing in Asia.
2 Paul Krugman insisting nobody understands debt, in The New York Times. When people in D.C. talk about deficits and debt, by and large they have no idea what they’re talking about — and the people who talk the most understand the least. For while debt can be a problem, the way our politicians and pundits think about debt is all wrong, and exaggerates the problem’s size. Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.
This is, however, a really bad analogy in at least two ways. First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; US debt is, to a large extent, money we owe to ourselves. It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of US claims on foreigners. And because foreigners tend to put their US investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction. So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.
3 The New York Times on IBM and its CEO until last week, Samuel Palmisano. Because it has become so consistently successful, IBM is almost boring. This is a company so predictable that its financial forecast is packaged as a “five-year road map” as if it were some sort of state planning exercise. A large portion of the credit goes to Samuel J Palmisano, who stepped down on Sunday after nearly a decade as chief executive. During his tenure, IBM has been a textbook case of how to drive change in a big company — when so much of the study of business innovation focuses on start-ups and entrepreneurs.
He says his guiding framework boils down to four questions: 1. “Why would someone spend their money with you — so what is unique about you?” 2. “Why would somebody work for you?” 3. “Why would society allow you to operate in their defined geography — their country?” 4. “And why would somebody invest their money with you?” Palmisano formulated those questions in the months after he became CEO in March 2002. The four questions, he explains, were a way to focus thinking and prod the company beyond its comfort zone and to make IBM pre-eminent again. He presented the four-question framework to the company’s top 300 managers at a meeting in early 2003. “This needs to be our mission and goal, to make IBM a great company,” he said.
4 The Guardian on Zimbabwean workers complaining of Chinese abuse. Zimbabwe’s national defence college is under construction within a sprawling, heavily-guarded compound whose brooding presence sends a clear message to any would-be revolutionary. The construction site north of Harare has also become the lightning rod for another source of simmering resentment – Chinese labour practices. Surrounded by a perimeter wall that runs for a kilometre through what was once farmland, the shadowy military academy is being built by a Chinese contractor whose managers are accused of meting out physical punishments, miserable conditions and meagre pay.
"The beatings happen very often," said a 28-year-old carpenter, wearing blue overalls as he made the long walk home after a 14-hour shift. "They ill-treat you and, if you make a mistake, they beat you up. The Zimbabweans and Chinese rarely mix, he added. "They don't speak English so we use sign language. The Chinese eat off plates, then give us the leftovers." A 26-year-old builder, on his way to a nightshift, said: "We tried to go on strike but the leader of it was beaten up and sacked. The government doesn't say anything, even though it knows people are beaten up. I saw them undress some workers and beat them with helmets. Some of them were crying with the pain. "We feel angry but we need money, so there is no choice. If you don't work 10 hours, there is no money."
China’s commercial empire has expanded enormously in Africa over the past decade and Zimbabwe is trying to catch up. Trade between the two countries stood at $550m last year, according to the Chinese embassy. The government in Harare has announced that China plans up to $10bn in investments over the next five years, more than in any other country. Diamonds and other mineral resources are the main attraction, but Chinese entrepreneurs have also seized opportunities in construction, manufacturing and retail.
5 The Guardian on a Saudi law to have only females work in lingerie stores. Saudi Arabia will begin enforcing a law that allows only females to work in lingerie and apparel stores, despite disapproval from the country's top cleric. The 2006 law banning men from working in female apparel and cosmetic stores has not been implemented up to now, partly because of view of hardliners in the religious establishment, who oppose the idea of women working where men and women congregate together. Saudi women – tired of dealing with men when buying underwear – have boycotted lingerie stores to pressure owners to employ women. Law enforcement starts on Thursday.
The kingdom's religious police enforce Saudi Arabia's strict interpretation of Islam, which prohibits unrelated men and women from mingling. Women and men in Saudi Arabia remain highly segregated and are restricted in how they are allowed to mix in public. The separation of men and women is not absolute. Women in Saudi Arabia hold high-level teaching positions in universities and work as engineers, doctors, nurses and a range of other posts.
6 The San Francisco Chronicle on a girl with a funny talent. Some people can wiggle their ears. Others can cross their eyes or whistle like a bird. And then there’s a girl named Sarah whose funny talent is especially entertaining—and unique. The 13-year-old from Sydney, Australia, can make her eyebrows dance. Sarah, whose last name and back story are unknown, posted a video of herself performing impressive eyebrow dance moves to music last week and became an Internet sensation in a matter of days. Her YouTube video, “Girl with a Funny Talent,” has been viewed more than 7 million times.
7 The San Francisco Chronicle on Japan’s ‘mancession’. Three times a week, Seiya Ogawa bikes to an unemployment center in Kadoma, home to Panasonic Corp., looking for work to help pay for his son's final year at college. "At this point, I'm willing to take any job," said the 49-year-old, who assembled electronic circuit boards in what was once a bustling manufacturing suburb of Osaka, Japan's third-largest city. This month, it's officially one year since he first signed on at the center, and "it's like my humanity's been stripped from me," he said.
Ogawa and his son rely on the incomes of his wife and daughter, a social role reversal that is spreading in Japan as factories and building companies fire workers and services that hire mostly women add employees. The increasing burden as breadwinners also gives women less incentive to marry and have children early in a country that already has the fastest-aging population in the developed world.
8 The BBC on Saudi Arabia’s huge budget surplus. Saudi Arabia has posted an $81.6bn budget surplus for 2011 as its income beat forecasts by more than double, official figures suggest. Revenues grew to $296bn, although ministers had forecast $144bn, said the Saudi Arabian finance ministry. The country plans to reduce spending in 2012 to $184bn after officials said they expect the surplus fall to just $3bn next year. Analysts however, see this as another conservative forecast. Most of the growth in revenue was driven by oil production which accounts for around 90% of the country's exports.
9 The BBC on Nikkei being at its lowest year-end level since 1982. Japan's main share index has closed at its lowest end-of-year level since 1982. The Nikkei 225 index finished last Friday up 0.7% to 8,455.35. Stocks have been hit by a weak global economy, as well as a devastating earthquake and tsunami on 16 March that left 20,000 people dead or missing and sparked a nuclear crisis. Shares have lost a fifth of their value this year, with the majority of losses in the two days following the disaster. The disaster severely disrupted manufacturing at carmakers such as Toyota and electronics firms such as Sony. Shares in Tepco, the owner of the Fukushima nuclear power plant that became the focus of an effort to prevent a meltdown, dropped 91% this year.
10 The Johannesburg Times on an Afghan girl rescued from torture by her in-laws and likely to be sent to India for treatment. An Afghan official says a 15-year-old girl severely tortured for months by her in-laws who wanted to force her into prostitution will be sent to India for medical treatment. Interior Ministry spokesman Sediq Sediqi said Sahar Gul's mother-in-law and sister-in-law were arrested and her husband was being sought. Gul was brutally tortured, beaten and locked in a toilet by her husband’s family for months after she refused to become a prostitute. She was in critical condition when she was rescued from a house in northern Baghlan province last week, after her neighbours reported hearing Gul crying and moaning in pain. According to police in Baghlan, her in-laws pulled out her nails and hair, and locked her in a dark basement bathroom for about five months, with barely enough food and water to survive.
11 Khaleej Times on India being a junk-mail country. India has emerged as the world’s top source of junk mail as spammers make use of lax laws and absent enforcement to turn the country into a centre of unsolicited email. A recent report by Kaspersky Lab, a Moscow-based global Internet security firm, says more spam was sent from the south Asian giant than anywhere else in the world in the third quarter of the year. An average of 79.8% of email traffic in the three months to the end of September was junk. Of that, 14.8% originated in India, 10.6% came from Indonesia, and 9.7% from Brazil. Vijay Mukhi, an Internet security specialist in India’s financial capital, Mumbai, said spammers, forced to look for new bases after other countries cracked down on the practice, can act with impunity in India. ‘We have an Information Technology Act that was introduced in 2000. But we don’t have any convictions under it and it’s silent on spam,’ he told AFP. ‘If I’m a spammer, I would rather spam from India to India and the rest of world because nothing will happen to me.’ India’s booming mobile phone sector, which has recently seen the introduction of third-generation smart phones, also provides a potential open door for spam and malware (malicious software), industry figures say.
12 The Dawn on a Muslim revolt in China after a mosque was torn down. Hundreds of Muslims fought with armed police who demolished a mosque in north China, local police and a human rights group said on Monday, with several people injured in the “riot”. The violence between local Muslims and roughly 1,000 armed police began after police declared illegal a newly renovated mosque in the Ningxia Hui Autonomous Region and moved to destroy it, the Information Center for Human Rights and Democracy, in Hong Kong, said. The Hui are one of several Muslim minority groups in China. A policeman surnamed Ma confirmed that the mosque was torn down. He told AFP a “riot” occurred in Hexi on Saturday afternoon.
13 The Wall Street Journal on power problems threatening India’s growth. Almost a decade ago, India's government, seeking to overcome one of the biggest challenges to the nation's development, set an ambitious goal: electric power for all by 2012. Instead, as the target date of March nears, the power sector is in shambles, and its dire state threatens India's economic prospects at a time when a high inflation rate, a burgeoning government budget deficit and ripples from the European financial crisis are already damping growth. India is the world's fifth-largest electricity producer after the US, China, Japan and Russia, but its per capita consumption is among the world's lowest, at 778.71 kilowatt hours a year. Almost 300 million people don't have access to electricity. The country needs a huge jump in supply to sustain its rapid economic growth, fight poverty and light the homes of those powerless millions.
More than half of India's installed electricity-generating capacity of 182 gigawatts is coal-based, and a large chunk of future power projects also will run on coal. By comparison, China's installed capacity at the end of 2010 was 962 gigawatts, about 73% of it from coal. India's coal sector is hampered by primitive mining techniques and rife with theft and corruption; the monopoly coal producer, state-controlled Coal India, has consistently missed production targets. Shoddy transport infrastructure, inadequate for moving coal from far-flung mines to where it is needed, compounds the problems. "The situation is extremely challenging considering the fact that billions of dollars have been invested in building power plants but they can't be used to produce power due to non-availability of coal," said Ravi Sharma, chief executive of Adani Power.
14 Stephen Roach holding forth in The Financial Express on why India is riskier than China. Today, fears are growing that China and India are about to be the next victims of the ongoing global economic carnage. This would have enormous consequences. Asia’s developing and newly industrialized economies grew at an 8.5% average annual rate over 2010-11 -- nearly triple the 3% growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession. In one important sense, these concerns are understandable: both economies depend heavily on the broader global climate. China is sensitive to downside risks to external demand -- more relevant than ever since crisis-torn Europe and the US collectively accounted for 38% of total exports in 2010. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets. Yet fears of hard landings for both economies are overblown, especially regarding China.
It is a serious exaggeration to claim, as many do today, that the Chinese economy is one massive real estate bubble. Yes, total fixed investment is approaching an unprecedented 50% of GDP, but residential and non-residential real estate, combined, accounts for only 15-20% of that -- no more than 10% of the overall economy. In terms of floor space, residential construction accounts for half of China’s real estate investment. Identifying the share of residential real estate that goes to private developers in the dozen or so first-tier cities suggests that less than 1% of GDP would be at risk in the event of a housing market collapse -- not exactly a recipe for a hard landing.
India is more problematic. As the only economy in Asia with a current account deficit, its external funding problems can hardly be taken lightly. Like China, India’s economic growth momentum is ebbing. But unlike China, the downshift is more pronounced -- GDP growth fell through the 7% threshold in the third calendar year quarter of 2011, and annual industrial output actually fell by 5.1% in October. But the real problem is that, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means that the Reserve Bank of India can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of around 9% of GDP limits India’s fiscal-policy discretion. While China is in better shape than India, neither economy is likely to implode on its own. It would take another shock to trigger a hard landing in Asia.
Subscribe to:
Posts (Atom)