The End of (American) Influence

Excerpts from "The End of Influence"
BY BRAD DELONG, STEPHEN COHEN | DECEMBER 23, 2009

For more than a quarter century now the countries of the world have been dreaming the neoliberals' dream. They have been trying to shrink their states back to their core competencies to promote economic efficiency, global economic integration, and growth, and to slash through red tape, rent-seeking, and simple corruption. They have been actively privatizing state holdings. They have hugely reduced their ownership and their active involvement in "national champion" companies. They have cut back on interventions to affect market outcomes and on regulation to scrutinize and control market players.

But now they are waking up. And the neoliberals' dream is at an end.
To understand why, we need to journey back to the mid-20th century. The coming of World War II ensured that whatever money still remained in Britain left quickly. Franklin Delano Roosevelt ruled an isolationist country that he wished to cajole into engaging in the war with Hitler as early and as completely as he could. But part of Roosevelt's strategy (and a not-altogether unwelcome consequence, for many who worked in the State, War, and Navy Building-a Victorian-era structure just west of the White House that looked like a French brothel) was to make Britain broke before American taxpayers' money was committed in any way to the fight against Hitler. Only after Britain had sold off the family silver to pay for the nozzle would America "lend" Britain its garden hose to fight the Hitlerian fire.
America did come to the aid of its closest, cherished, and most important embattled overseas ally after Britain was broke. The Grand Alliance was the great moment in the grand story of the English-speaking nations. It does remain Churchillian in the inherited grandeur of its narrative. And America did come to the rescue of England, and together-with enormous although unloved assistance from the Red Army of the Soviet Union and Josef Stalin-America did save the world from the horrors of the Nazis. But while we were gearing up to come to the rescue, we squeezed the British, and when World War II was over, the United States, not Britain, had the money. When the British borrowed money from us, it had to be repaid in dollars, not in sterling. And imports into Britain had to be rationed well into the 1950s.


Will the United States be similarly squeezed? No. We are not engaged in a total war. We do not domestically produce only 1,200 calories of food per citizen per day. We are still by far the world's largest national economy. The United States is technologically powerful and resourceful and is still the center of world finance. World finance is still transacted in dollars. And the United States remains the world's only military superpower, whatever that may turn out to mean.
But the United States is losing the money. America is now massively in debt to foreigners and will be more in debt with each passing year as far into the future as forecasters can see. It will not be squeezed as it squeezed Britain, but it will be constrained.

Back when the United States had the money, it used it to pay attention to other governments only when it chose and to make certain that other governments paid attention to the United States even when they wished to not so choose. With the Marshall Plan, America made Western Europe an offer that all but forced Western Europe to adopt the mixed-economy social-democratic order of the post-World War II North Atlantic. It financed and arranged "regime change" in lesser countries to remove governments that seemed to be veering off into serious error. In all this, the United States used the leverage of having the money exclusively for the global greater good.

Who has the money now? What can they do with it? What are they holding? The smallest big batch of money held by other people is simply cash: greenbacks. Perhaps $450 billion, perhaps more, circulates abroad in cash, in hundred-dollar bills. Some countries, such as Panama and Ecuador, have formally gone over to a dollar economy. In other countries (such as Lebanon), cash dollars are widely used. Then, of course, many individuals and organizations prefer the anonymous convenience of hundred-dollar bills: drug dealers; arms merchants; Russian operators; Argentines and Eastern Europeans with doubts about their local currency; rich and not-so-rich Chinese, who live in a cash economy where the largest Chinese currency note in circulation is 100 yuan (about $15). Though not often discussed in polite company, seigniorage, that is, the ability to coin or print cash (the right held by a feudal seigneur) and have other folks hold it, is valuable: Those who hold the $100 bills have, for many, many years, been providing a substantial loan to the U.S. government -- and it's interest free!


The bigger big batches of dollar-denominated and U.S.-located assets -- and they are very big indeed -- are not cash but are rather investments. A great deal is held by private foreign individuals and organizations: Japanese housewives, German doctors, Scottish pension funds, Dutch companies, Colombian drug lords, Japanese insurance companies, sons of Gulf sheiks, and Russian "businessmen."
This money is private money. It belongs to market players -- people, companies, organizations, and institutions looking for the highest returns at the lowest risk. Much of the money is in the hands of the governments and rulers of oil-producing states (or in the hands of whatever or whoever holds their money). Truly great piles of U.S. obligations are in the hands of the governments of Asia. Japan holds about $1 trillion in reserves (which comes to almost $9,000 per U.S. household). Taiwan, Hong Kong, and Singapore together hold something like $500 billion. Korea sits on another $200 billion.

But it's China that is the biggest holder of U.S. obligations, with some $2.5 trillion in "reserves," the lion's share of it in U.S. debt obligations. America owes unimaginably large amounts of money to lenders (such as China), about $20,000 per American household, three-fourths of China's GDP, a fact worth repeating, a fact that makes rapid repayment impossible.

Proverbs 22:7 instructs us: "The borrower is servant to the lender." But the lesson requires some exegesis to fit smoothly into context. The burden of the U.S. foreign debt may be better explained by the oft-repeated Wall Street wisecrack, which we repeat: When you owe the bank $1 million, the bank has got you; when you owe the bank $1 billion, you've got the bank.

Neither side can walk away; we're locked. The debt binds China especially and other governments that have the money. Selling the debt would send the dollar way down and thereby destroy the value of their dollar holdings and severely damage their economies' massive export-based sectors. Worse yet, sell it for what? Their "reserves" are so huge that there is nothing else they can hold them in, not at that scale. From a Chinese viewpoint, it's exasperating.

The U.S.-China economic imbalance has forced the two powers into a very intimate and not very desired embrace, something Lawrence Summers once called a financial balance of terror. This is all to the good: The two powers must learn to work as partners, and not just in economic matters -- global warming and global order also need positive Sino-American cooperation, and they are much more important long-term issues. Sino-American partnership, in managing the complex mess of their imbalanced economic codependency, can constitute a good beginning for managing the utterly unhinged problems of world balance and order. We have no acceptable choice but to get good at it, and that will take some doing on both sides.
As money alters power relations, the United States is not simply becoming dependent -- but it is no longer independent, either. That is a major change. And China is no longer helpless and cowed in face of the superpower hegemon; it has got a grip on it. Indeed, while the world peeks in, the two countries are realizing that they have thrown themselves into an intimate economic embrace with, to say the least, very mixed feelings.

For the past 30 years, America rather successfully propagated to itself and others a worldview of unfettered markets and "re-fettered" states: Expand the realm of markets in society and roll back the reach of other institutions, especially government. They backed that worldview with money and, until it crashed, this American outlook was willingly adopted by more and more people and governments around the globe. Soft power -- not military might, not straight-out money, but the ability to inspire acceptance and imitation -- was a vital component of American international dominance. It soothed the abrasiveness of military and economic power and made the wielders of such power feel good.

Money, of course, is power. Because America had the money -- had it solidly, rightfully, self-assuredly, and durably -- for about 100 years, people all over the world wanted to be like Americans: successful, modern, loose-jointed, efficient, democratic, socially mobile, leggy, clean, powerful, and, of course, rich. Money brings a nation power, not just the power to command, or at least influence, the behavior of other nations. And when the money accumulates over time and as a result of real economic success, and not just windfalls from guano or oil deposits, it brings the power to propagate, consciously or not, the ideas, concerns, fashions, norms, interests, amusements, and ways of displaying and behaving that come out of its culture. These penetrate deep down into other cultures as well as its own; they become part of daily life. This is luxuriant power: It doesn't have to be exercised willfully or even consciously, and it doesn't even cost anything extra. It was clearly the way to be.

As the United States emerged in the aftermath of World War I as the top power and giant money master, American jazz swept through Europe, faster than Ford and Kodak. Later, especially after World War II, Europeans eagerly welcomed the onslaught of American movies. Most Europeans encountered America at the movies, but two generations of rather privileged Europeans traveled to America to see for themselves (many sponsored by the State Department), to behold the skyscrapers of New York, the George Washington and Golden Gate bridges, and the houses of rather ordinary people with huge shiny cars, washing machines, televisions, and the orthodontically enhanced smiles on tall, milk- and meat-fed women.

American cultural dominance has continued to grow. Teenagers around the globe now uniformly dress in styles pioneered by American teens and have even adopted the same body language. They eat on the street. The American-designed, Asian-manufactured iPods fill their heads with the same harsh music; they instant-message, blog, and Tweet. And the English language -- not altogether an American cultural invention -- is not merely the international language, but also the second language for a vast global population: Languages carry more than their words and grammar; they carry cultural form and content.

America will be less and less the origin of new cultural trends or global memes: First, because the others now have the money. But also, because while America remains especially modern, the modern is no longer especially American; it is rapidly becoming semiglobal and if not old, at least very mature. There is no need to leave China to see skyscrapers; there are more of them in Shanghai than in New York, and they are newer, taller and bolder. The energy -- that key element in New York 1920s literature (e.g., Dos Passos) has, with the money, shifted its residence. For the foreign traveler now arriving at New York's Kennedy airport, the ride into Manhattan is still eye-opening, but in a new way: litter and slums line the Van Wyck Expressway through Jamaica, Queens, where rust and graffiti festoon the old transit trains and bridges; the roads are poor; there is no proper train into town -- let alone something as sleek and fast as in Hong Kong or Shanghai. Hollywood no longer has an inherited, built-in meganarrative -- the presentation of life in modernity in all its weird and quotidian forms: How women walk and speak, houses, murder, seduction, sex, kitchens, raising children, "making it," excursions, courtrooms, shopping centers, schools, hospitals, universities, and office buildings -- the world, perhaps of your future.

The culture created by America and exported by its movies is not gone; it's not even going. It has simply gone universal and is now open to a vastly expanded range of contributors. This is very likely to be a good thing for American and world culture, an opening to new ideas, talents, and energies. And America's ambient culture is being enriched by foreign imports ranging from soccer to sushi, not to mention energetic Ph.D.'s in material and biological sciences.

America is sure to remain a leader in cultural power, but there is a difference between being a cultural leader and an easy, almost un-self-conscious cultural dominance. Our research universities are the envy -- and model -- for the world. So too are our high-tech, biotech, and nanotech genre Silicon Valley-type firms, with their multinational, multiracial, and monocultural workforces of the bright, ambitious, educated, and driven. And there is also a powerful emergent American cultural force best represented by Barack and Michelle Obama: America might yet develop new meganarratives to succeed the world of modernity that will seize the world's hearts, fears, longings, and energies. But no matter how creative its creative people become, as in the realms of economic and political power, America is unlikely to remain the cultural hegemon, the overwhelmingly dominant source of cultural memes

Growing Justice Gap in India

Outrage is growing in India over a six-month jail sentence handed out to a former senior police officer convicted for molesting a 14-year-old girl.Ruchika Girhotra complained in 1990 that she was assaulted by SPS Rathore.After Mr Rathore used his influence to harass the Girhotra family, Ruchika committed suicide three years later.
Earlier this week, a court found Mr Rathore guilty, but Ruchika's family and activists say he has got away with a "very light punishment".

Mr Rathore sentenced in jail for six months and ordered to pay a fine of 1,000 rupees ($20).

Comment:

Last Month I read about a India given rating on par with African Countries for Social Justice. The number of incidents in which Justice is denied even in cases which have very high public attention. The growing Justice Gap mirrors the widened economic gap during the Globalization era. The excess of the rich and political class during this period will become more and more evident as time progresses.

Telangana demand shows people feel neglected: Chidambaram

NEW DELHI: Home minister P Chidambaram on Thursday said the demand for a separate Telangana state in Andhra Pradesh showed how people feel neglected despite speaking same language. "Last night (Wednesday) the government announced initiating the process of formation of Telangana. The region is a good example of how people feel neglected despite speaking same language," he told reporters.When asked about the possible impact of state formation, he said: "The US has one-third of our population still it has 50 states."

As I had written in the earlier blog on Telegana, The separation of Andhra Pradesh, and then subsequently other states is an inevitable consequence of the Rural and Urban divide in India and the globalization bull run. This separation would rewrite the Indian Political Scenario completely within a decade. Congress hopes it can still ride the tiger.

On the hind-sight, it would also see the death of linguistical chauvinist politics which is bigger menance (DMK, MNS etc.) This could be seed for death of DMK, on the very day the Madurai case verdict is announced, as TN itself could be bifurcated. If that happens, it would be the ultimate poetic justice.

Silent Protest

Amarya Sen had written a book differentiating between Nidhi - Written Law of the Land and Nyaya - Justice - the implementation of the law. Yesterday was a shameful day for Tamil Nadu's Nidhi and Nyaya. I'm talking about the Murders at Dinakaran Office in Madurai.

A report from the TOI

On May 9, 2007, a mob attacked the Madurai office of Tamil Daily 'Dinakaran' owned by Kalanidhi Maran. They smashed windows, computers and furniture, and set fire to the building. Three people - watchman K Muthuramalingam and engineers G Gopinath (25) and M Vinod Kumar (23) - were killed in the mindless violence. The Sun Network, which owns 'Dinakaran' was unambiguous while identifying the perpetrators of the violence: M K Alagiri's goons.

Two years and seven months later, on December 09, 2009, the Madurai district and sessions court acquitted all the 17 accused in the case. The judgment has shocked several people, but not some others who were closely following the case which was handed over to the CBI for investigation. Video footage of the attack were submitted in the court during the trial. And then, first witness who is a sub inspector of a nearby police station, and the second witness who is the deputy news editor of 'Dinakaran' turned hostile.

The Hindu also reported that the Judge gave the verdict in just a Single Line. The Gross violations of the law and justice is a everyday phenomenon in Tamil nadu. Anna, the Founder of DMK had said that Law is a Darkroom. But the Current DMK government seems to say that "Justice is also a darkroom" and that might be the reason why Newspapers are not even carrying a report on this minor incident.

I thinks all the protests to this incident is very silent.

Telegana - The Siege within India as History repeats itself

The battle for the Telegana State is eerily similar to the battle for Andra Pradesh State in 1950s. Ramachandra Guha writes about the Andra Movement in the Hindu:

On December 3, Nehru wrote to Rajagopalachari: "Some kind of fast is going on for the Andhra Province and I get frantic telegrams. I am totally unmoved by this and I propose to ignore it completely". By this time Sriramulu had not eaten for six weeks. As his ordeal went on, support for the cause grew. Hartals were called in many towns. The sociologist Andre Beteille, travelling to Madras from Calcutta at this time, recalls having his train stopped at Vizag by an angry mob shouting slogans against Rajaji and Nehru.

Nehru now recognised the force of popular sentiment. On December 12, he wrote again to Rajaji, suggesting that the time had come to accept the Andhra demand. "Otherwise complete frustration will grow among the Andhras, and we will not be able to catch up with it". But the formal announcement was delayed, and Sriramulu continued his fast. On the 15th he died. The next day all hell broke loose. Government offices were attacked, and trains stopped and defaced. The damage to state property ran into crores of rupees. Several protesters were killed in police firings. On the 16th, Nehru made a statement saying a state of Andhra would come into being, but its boundaries would be decided by an independent Commission. In March 1953, the Telugu districts of Madras were identified for separation; later, these were joined by Telugu-speaking areas of Hyderabad to constitute the present state of Andhra Pradesh.

What is the consequence of the Creation of Andra Pradesh? The Creation of Andra led to the creation of other linguistic states like Maharastra, Gujarat etc crushing the hope of Nehru and Rajaji to create a federal India with a common culture. Over the decades, It also reduced the political influence of Congress as many of the states have regional power-centres whose coalition is the only significant threat to Congress.

What would be the consequence of Telegana? Telegana itself is a political movement whose inner core is the vast socio-economic disparities between the Rural and Urban Andra. This inner core issue is the same across many states in India especially Tamil Nadu, Karnataka and Maharastra. The short-sightedness of Chandrababu Naidu and later YSR who focused all their attention on building Cyberabad, neglecting the rural Andra has led to the emergence of Telegana movement. The same short-sightedness applies to Karunanidhi in Tamil Nadu, CMs of Maharastra and Karnataka also. As this is a national phenomena, the responsibility of this rests on the Central Government. The Congress took advantage of stupidity of “the India Shining” BJP Government which ignored the rural India and came to power. It’s answer to the rural-urban divide, the NREGA program for the rural, is an socio-economic planning disaster but political success as it had created a rural votebank for them. As the Congress was voted back to power, Manmohan Singh and Chidambaram had thought that they had solved the Rural-Urban divide. The Telegana movement is the voice of the lower-middle classes of rural India which was ignored by the Congress and is now starting to haunt them.

Once Telegana is granted, it would pave the way for many other smaller states atleast in South India such as Kongunadu in Coimbatore region, Vidharbha in Maharastra etc. This will be disaster for the National Parties and even current State level Parties as hyperlocal issues would dominate the politics there reducing the national influences. The inter-state disputes especially in South India would be even more unmanageable. Telegana Movement is clearly the Siege Within that is brewing in India which would to larger threats to India’s stability. The support enjoyed by the Telegana movement has started giving nightmares to Indian Politicians.

So whatever be the turnout of the current Telegana Movement, the clear winners would be rural lower middle classes of India would have been completely left out of the Globalization wave. The Telegana movement is a wake up call for Karunanidhi who had largely ignored the Kongu region. The Telegana's impact on Tamilnadu will be seen shortly from the upcoming plans of Karunanidhi's DMK government for the Kongu Region. Similarly there will be change in stance of the MNS of Maharastra which had so far been barking at the wrong issue of marginalization of Maharastrians in Mumbai.

Brief History of Socialism in America

Gold Price Timeline

Pranav Mistry: The thrilling potential of 'SixthSense' technology

Devdutt Pattanaik: East vs west -- the myths that mystify

Hans Rosling: Asia's rise -- how and when

Dubai - A snapshot

The Big Picture

from the Big Picture

Changing the World's Living Condition

Once in a decade, some ideas and people change the world's lifestyle significantly. One such idea/perspective is Enrique Penalosa. He is like Mohammed Yunus of Grameen Bank.



Quotes from his talk in Chennai.

0. “The single biggest difference between the infrastructure of an advanced nation and a backward nation is its footpaths, not its highways”

1. Parking is not a constitutional right in any country ... It’s a private problem that should be solved in private spaces with private money.
   
   
2. A bus lane will move 40,000 people per hour. One lane of cars will transport less than 2,000 people. Which is more efficient?
   
   
3. Only 5 per cent of households in the city drive cars
   
   
4. Look at the poorest African nations — they will all have some highway … But it is the quality of the footpath that determines the quality of life in a city

Just two days back, I was having with a chat with my neighbour while driving the narrow paths of Chennai City. My Neighbour said that many NRI people do not want return to India just because of the conditions of the city roads.

There is some effort in developing parks and other public places in Chennai. After a long time, statues that are pure artwork and other than Leaders are getting installed. If the enchroachments are removed and more concreted efforts are invested to develop the public properties of Indian Cities, Life in India would be much more better. I hope that our corporations' leaders get inspired by Enrique Penalosa.

Indian car exports surge 36 pc in first half of 2009-10

Car exports from India in the first half of this fiscal jumped by 35.73 per cent as major manufacturers like Hyundai Motor India and Maruti Suzuki cashed in on scrappage incentive provided in Europe, despite other segments of the auto industry witnessing decline.

According to Society of Indian Automobile Manufacturers Association (SIAM), car exports during April-September stood at 2,10,088 units as against 1,54,783 units in the year-ago period.

The European Union (EU) nations had incentivised buying of new cars in exchange of the old ones under a scrappage programme in May that will run till February 2010.

The growth in exports were largely driven by the country's largest car maker Maruti Suzuki India as its overseas shipments rose over two-fold during April-September to 65,752 units from 29,699 units in the year-ago period, SIAM said.

Hyundai Motor India, the country's largest car exporter Hyundai reported 16.02 per cent jump in exports at 1,39,971 units against 1,20,648 units in the same period last year.

Is Automobiles the new sunshine industry for India?

Move or Lose - Migration and World on the Move

The 2009 Human Development Report (HDR), released simultaneously across the world on Monday, makes a strong case for removing barriers to migration within and across borders, arguing that human movement had brought perceptible all-round benefits and held the potential to improve the lives of millions of poor and low-skilled people.

Released jointly here by Deputy Chairman of the Planning Commission Montek Singh Ahluwalia and United Nations Resident Coordinator Patrice Coeur-Bizot, the report, “Overcoming barriers: Human mobility and development,” says: “The poorest and the low skilled could benefit the most by moving, yet they face the largest barriers to movement: legal, financial, social.”

The report estimates that nearly one billion (one out of seven) people the world over are migrants. Of this, 740 million are internal migrants — almost four times as many as those who have moved internationally. Among those who have emigrated out, just a third or only about 70 million people, have moved from a developing to a developed country. “Most of the world’s 200 million international migrants moved from one developing country to another or between developed countries.”

Some disturbing Questions :
1. How does migration impact on Nationhood?
2. As the world is on the move, does staying put in one's own country means losing out?

US relaxes grip on Internet

Quickly following the rise of G20,The US government has relaxed its control over how the internet is run.

It has signed a four-page "affirmation of commitments" with the net regulator Icann, giving the body autonomy for the first time. Previous agreements gave the US close oversight of Icann - drawing criticism from other countries and groups.The new agreement comes into effect on 1 October, exactly 40 years since the first two computers were connected on the prototype of the net.

'Global system'

The Internet Corporation for Assigned Names and Numbers (Icann) is a not-for-profit private sector corporation - set up by the US government - to oversee critical parts of the internet, such as the top-level domain (TLD) name system. Top level domains include .com and .uk.

can Sept'09 be marked as the start of globalization 2.0?

Another Indian Success Story - Auto Clusters

From Swaminomics : India has overtaken China as a car exporter this year, exporting 201,138 cars in January-July against China’s 164,800. What’s more, Indian exports in this period went up 18%, while China’s fell by 60%.

Of other big Asian exporters, Korea’s exports have fallen 31% and Thailand’s 43%. In a terrible global recession, India is the only country with zooming exports. Hyundai has long made India an export hub for small cars, and aims to export 300,000 India-made cars this year. Maruti-Suzuki comes second in exports, with Tata, Mahindra and others well behind. Nissan is about to build a new factory in India specifically for exports. India looks like exporting half a million cars in 2009-10, and should cross the million mark within five years.

Mr. Aiyar feels that cheaper and quicker R&D talent is what has clinched the auto industry leadership for India. However Indian Auto Industry is also known for its Clusters (like in Coimbatore and Chennai) which are low cost sweatshops. Mr. Aiyar also points out that Indian Auto Industry was not planned top-down strategic but emerged bottom up cut-throat competition. This bottom up emergence is the growth of the small and medium size entrepreneur driven clusters growth.

India set to ride on 3rd Wave of IT Outsourcing

According to Sudhakar Ram is chairman and managing director of Mastek, a Mumbai-based IT solutions company, Another wave of IT outsourcing is brewing.

Here is a summary of his article from businessweek:

Over the last 30 years, the Indian IT outsourcing industry has gone through two stages. The first wave was characterized by staff augmentation—"body shopping," as it was then called—and established that Indian IT professionals were as good as their Western counterparts. The second wave saw the establishment of offshore development centers. Started during the 1990s to fix the Y2K bug, these centers evolved to deliver software maintenance and incremental developmental services for a fraction of the cost U.S. companies would pay for similar work at home. Second-wave firms now also deliver ERP implementation and maintenance, infrastructure management, and testing services. Today, India exports more than $25 billion of IT outsourcing services and is the mainstream destination for offshore programming. It commands more than a 70% share of the global offshore outsourcing market.

Over the last few years, we have seen a third wave emerge: a growing reliance on outsourcing companies for high-end strategic work. Indian firms have won a significant portion of the work through strategic outsourcing deals like the one announced recently with BP (BP). Large Indian IT services firms are today seen as being on a par with companies like IBM (IBM) and Accenture (ACN) for delivering strategic cost advantages.

Leveraging Third-Wave Indian IT Companies

While the problems of legacy systems have been known for quite some time, corporations have been reluctant to address this issue for two reasons—risks and costs.

The risks associated with legacy modernization are twofold: requirements management and large program execution. Requirements management is a risk because of scant organizational knowledge and documentation about these core legacy systems. Many have tried reverse engineering with little success. In many ways, reverse-engineering software code is like assembling a jigsaw puzzle. Imagine putting together a 1,000-piece puzzle without the picture on the box.

The only viable method for addressing the requirements challenge is a combination of forward engineering, reverse engineering, and pragmatic business support. In brief, this approach entails strong teams of local domain and subject matter experts re-specifying requirements in conjunction with the business users. This effort must be supported by teams of business analysts and technical analysts who reverse-engineer the software code. From time to time, executive support must make pragmatic decisions on inventing new business rules/logic where the old rules are indecipherable or obsolete.

Third Wave Indian firms recognize this need for multiskilled teams. They have strong domain experts and subject matter experts in the countries where they operate, supplementing the technical resources from India. They recognize that the Second Wave approach of working to a customer-given specification will work for application maintenance and minor enhancements, but will fail in large-scale transformation programs. These firms bring in deep domain expertise and are committed to co-creating the application vision in collaboration with their customers. They work side by side, in an iterative fashion, to develop and deliver the ultimate solutions.

In the area of large program expertise, Third Wave firms have the track record of much higher rates of successful delivery, largely due to their mature software engineering processes. The offshore model brings in cost efficiencies which make the legacy transformation programs more affordable. In addition, the collaborative requirements and design processes actually help in increasing the proportion of work that can be performed offshore, making the economics even more attractive.

In summary, it is imperative for large U.S. and European financial institutions to modernize their legacy IT infrastructure in order to survive, innovate, and flourish in the coming years. The costs and risks associated with embarking on such major transformation programs locally may be prohibitive. Third Wave Indian firms offer a more attractive alternative to deliver these programs successfully.

Ring of Fire and Fight against Red Terror

Popular Perception so far has been that India has significantly gained from globalization and was on the way of becoming a Economic Superpower while its neighbours had all failed.

Not long ago, Citing unrest in other neighbouring countries like Pakistan, Nepal, Myanmar, Sri Lanka and Bangladesh, Chidambaram said, India is in the middle of a "fire ring". "We are in the middle of fire ring. But we should not be singed in that big fire. We are trying to douse the fire and we don't want it to spill over, although it has already spilled over a bit in the form of home-grown terror outfits like the Indian Mujahideen," he said.

Yesterday, this myth is officially shattered by Prime Minister Manmohan singh who stated that the government is struggling against the naxalites in the north and north eastern regions of India. Expressing concern over increasing incidents of Naxal violence which he termed as the "gravest internal security threat", Singh regretted that the level of violence in the affected states continued to rise despite ongoing efforts to contain it.

Contending that Naxalism cannot be treated as a law and order problem, he said dealing with Maoists requires a "nuanced" strategy, a "holistic approach". "Despite its sanguinary nature, the movement manages to retain the support of a section of the tribal communities and the poorest of the poor in many affected areas. It has influence among certain sections of civil society, the intelligentsia and youth. It still retains a certain elan. All this adds to the complexity of the problem," Singh said. Referring to insurgency in the north-east, he said the situation in the region is "far from comfortable", especially in Manipur and Assam where current levels of violence were cause for concern.

These are regions in India that have not benefitted at all like the Indian neighboring states. A drastic policy overhauling is to made at the earliest. The review of the results of SEZs in India
is a good start. Such a review is already being held in Maharastra.

Asking state government to take the review of special economic zone (SEZ) policy, state planning commission has observed SEZs will lead to an imbalance growth in the state. Executive chairman of the Maharashtra's planning commission Ratnakar Mahajan released the outline of the targets state wishes to achieve in the 11th plan.

Out of 400 odd SEZs coming up in the country maximum are coming up in Maharashtra. Around 73 SEZs are proposed in the state, out of which 48 have so far received an in-principle approval from the state government.In this backdrop, a negative comment on SEZs from the state planning commission is going to provide much needed ammunition to opponents of SEZs. Most of the SEZs are coming up in the golden triangle of Mumbai-Pune-Nashik, which is already better developed area compared to other parts of the state. With the forthcoming SEZs in these areas, it is no doubt state's industrial growth will be multifold, but it will create further regional imbalance in the state, says the chapter on the SEZ.

Is globalization about to be rolled back in India?

Shrinking Credit Markets in US

Total U.S. consumer credit fell by a record $21.6 billion in July, Federal Reserve data showed on Tuesday, the latest hint household spending would be too weak to drive the economy's recovery from recession. Credit is still shrinking and that is going to have an impact on consumption. As such, this remains an important part of the recovery since without the smooth functioning of credit markets, the recovery may stall.

What does this mean?

1. The recovery, which many economists believe is underway, will be largely driven by goods restocking, after inventories were slashed to record low levels, government spending and historic low interest rates

2. There is no way that this recovery can be sustained unless we see a pickup in household spending. The big question out there is will we see Americans spend again to keep this recovery alive.

For Globalization, this indicator again raises the age old question : No global recovery till world finds a replacement for US consumers

BRIC's pledge $80 billion to IMF

The BRIC countries have pledged $80 billion to the IMF. China is providing $50 billion, India $10 billion, Russia $10 billion and Brazil another $10 billion. The BRIC is bargaining more say in running the Global Economy. The four countries have sought a greater say in the running of the IMF and other international financial institutions such as the World Bank, including a larger share of quotas and voting, said Brazil's Finance Minister Guido Mantega.

Some of the items to that seem to be discussed are :

1. Protectionism remains a real threat to the global economy and should be avoided, both in direct and indirect forms," said a communique by the four countries, collectively referred to as BRIC economies.

2. "We believe governments should work toward prompt and successful conclusion of the World Trade Organisation (WTO) Doha round in a way that ensures an ambitious, comprehensive and balanced outcome," the communique said

3. We propose the setting of a target for that shift of the order of 7 percent in the IMF and 6 percent in the World Bank Group so as to reach an equitable distribution of voting power between advanced and developing countries," the communique said.

"The US position paper has mentioned a figure of five percent, which in any case is very close to the BRIC position. It's virtually the same," said the source, referring to the shift demanded in the voting rights in IMF and the World Bank.

I think that parking all the billions of US dollars held by the BRIC in IMF is in the interest of both the developed and developing countries as it prevents devaluation of the dollars. If the US yielded to the BRIC demands, it would start of the globalization 3.0. Some times, there is a glimmer of hope of equality in the global economy. I wonder why global media or at least BRIC media can't drum up this story and put the people pressure to ensure that it happens for the betterment of all.

Related

Dollar role in Indian FX basket would change

Am I missing something?

is the Glass half full and half empty?

Reuters Reports:

U.S. job losses fell to their lowest level in a year last month, but the unemployment rate jumped to a 26-year high, painting a mixed picture of an economic recovery hindered by weakness in the labor market.

The Labor Department said on Friday the jobless rate climbed to 9.7 percent in August, the highest since June 1983. The bigger-than-expected rise suggested weak consumer spending would impede recovery from the worst slump in seven decades.

Employers cut 216,000 jobs, the smallest since August 2008, but the department revised upward the June and July job losses by 49,000.

Global recession ending: OECD

Yet another declaration that Global Recession is over.. does it means that while Indian Economy has shrunk, the global economy has expanded?

Reuters: The global recession is coming to an end faster than thought just a few months ago and may already be over, according to forecasts published by the Organization for Economic Co-operation and Development on Thursday.

The recovery may even prove a little stronger than previously predicted, OECD chief economist Jorgen Elmeskov told Reuters in an interview where he elaborated on the forecasts for several key economies.

"Compared with expectations a few months ago, we now have a recovery which ... may be coming a little earlier and it may be slightly stronger because financial conditions have improved more rapidly than we assumed a few months ago," Elmeskov said.

Further decline in Indian exports

BBC : India's exports declined at an annual rate of 28% in July, their tenth consecutive monthly fall, as the weak global economy continues to hit demand.

$1.4 trillion parked in safe havens abroad'

The 'core problem' of parking of Indian funds in tax havens abroad could be addressed only by a strong political will, said Prof R Vaidyanathan, a finance and capital markets expert, on Saturday.


He said a slew of measures, including making it mandatory for politicians to declare that they don't have funds parked abroad, could go a long way in addressing the issue.

He said funds in the range of $ 500 billion and 1.4 trillion belonging to Indians were parked in safe havens abroad, especially Swiss banks. Delivering the Nani Palkhivala memorial lecture on 'Tax havens and illegal wealth of India', Prof Vaidyanthan pointed out that $1.4 trillion was equivalent to Rs 70 lakh crore, more than India's national income of around Rs 50 lakh crore.

Citing a study by Global Financial Integrity Study, the professor at IIM-Bangalore said the average money taken away from India annually during 2002-06 was $27.3 billion. Thus, during the five-year period, the amount stashed away equalled $136.5 billion.

Prof Vaidyanathan also cited statistics available on the Union finance ministry website, on country-wise approvals for direct investments in JVs and wholly-owned subsidiaries during 1996-2007, which revealed that more than one-third of outflows out of the total of $31,000 million was to well-known tax havens such as Channel Islands ($5,400 million) and Mauritius ( $2,600 million).

Noting that at least 60,000 Indians visit Switzerland every year, not all as tourists, he said reports on all official and personal trips made by politicians should be submitted to the government.

Pointing out that the Swiss government had always maintained that it could not divulge details pertaining to its clients, except in specific cases, Vaidyanathan said the Centre should take up the issue on a multilateral forum to get back the black money.

Source : ET

UK - One in Six homes is workless

BBC: More than one in six UK homes which house at least one person of working age does not have anyone in employment, official statistics show.

Sprouts of Positive News

The mainstream media in US and India is full of stories of Economic Recovery, while in reality nothing has changed yet.

CBFE Economics writes

1. A lot of people are very thirsty for any kind of positive economic news. If you read any of these articles you'll see that conditions for most of these corporations are pretty dreary. Most are actually seeing declining sales and earnings. About the only positive thing to report is that they beat analyst expectations.

2. Many of these media organizations are clearly suffering in this downturn as well. A recovery would greatly benefit them. So its in their interest to promote as much positive economic news as possible, possibly in an effort to shift public opinion and promote more economic confidence (regardless of whether it is warranted or not).

3. Many of these media organizations want to paint a positive picture regarding the financial situation of these corporations because they have ties to them. For example, remember the story about Macy's I linked to up top? The retail sector is one of the biggest advertisers in just about every form of media.

4. Its the predominant thinking on Wall Street and these media groups don't want to rock the boat. Call it inertia, if you will.

Who moved my Cheese? - India

Bloomberg reports :

India will seek new customers for overseas sales as recessions in the U.S. and Europe damp demand for the nation’s products, Trade Minister Anand Sharma said.

“About 60 percent of our traditional export markets are in recession,” Sharma told reporters in New Delhi today. India will be looking to expand its markets to “make sure that our exports remain competitive,” he said.

The worst global recession since the Great Depression has cut demand for made-in-Asia goods. Flagging exports are forcing Indian companies in sectors such as jewelry, textiles and leather to cut production, weakening an economy expected by the central bank to expand at the slowest pace since 2003.

The Trade Ministry will announce more assistance for exporters in a policy statement on Aug. 27, Sharma said. India’s exports dropped 27.7 percent in June from a year earlier to $12.8 billion, the ninth consecutive monthly decline. Exports plunged 33.3 percent in March, the biggest fall on record, according to Bloomberg data going back to April 1995.

Indian Economy - behind the scenes

Nearly 1.3 lakh jobs have been lost during April-June 2009, in eight key sectors, including textiles,automobiles and IT/BPO in the country as a fallout of the economic slowdown according to the labour bureau. Tamilnadu labour secretary T Prabhahkar rao had not received any largescale representation about the retrenchment in the state. Reacting to the report, C.K.  Ranganathan, CII Tamil nadu president said temporary jobs in the automobile sector has been affected but not permanent.

Nandigram refuses die down

Some things simply refuse to die down.. Nandigram is one of those things it seems.

After routing the CPM in the recent national elections, Some Trinamul Congress workers have locked down a Gram Panchayat Office, demanding immediate reelections. The Police had opened up fire to disperse the crowd. One Person had died and Many are supposed to be in critical condition.

Dollar to remain top currency: German minister

The US dollar will remain the world's top currency after the financial crisis is over, but the euro and the Chinese yuan will gain in importance, Germany's finance minister said on Thursday. 

In an interview with Manager magazine to appear on Friday, Peer Steinbrueck was asked if the US dollar would retain its position as the world's reserve currency after the dust has settled on the worst economic crisis since the Great Depression. 

"That is the $10,000 question," Steinbrueck quipped. 

"I would say: yes, but the yuan and the euro will also gain in relative significance," the minister added.

Is China the next consumer market?

China's Automobile market is growing exponentially. They have an untapped consumer base that is constantly growing as China is expected to surpass the United States in the next 10 years. While Sales of Automobiles is a good indicator, the growth of real-estate sector is what would drive growth because once people buy homes, they would start buying things to fill them up, triggering growth in other markets like consumer goods etc. 

Even if this happens, this growth might not help the global economy much because most of goods required by the chinese households would be produced internally within China. Expecting China to replace US would be too optimistic.

Russia, China to push global currency at G8 summit

Brazil, Russia and China are supposed to challenge the dollar hegemony at the coming G8 summit. India seems to be conspicuously absent from voicing against the dollar.  However Germany, France and Canada are against including debate on dollar as reserve currency in the G8 summit. 

The emergence of a new global currency is one of the key milestones to be achieved before the next wave of globalization can start.

Dollar role in Indian FX basket would change

Suresh Tendulkar, chairman of the prime minister's economic advisory council has said that the weight of the dollar in the basket of currencies that helps set the rate of India's partially convertible rupee currency may be reduced. Asked whether the U.S. dollar should be weaker he said: "I think it is necessary...it should go down." <link>

No global recovery till world finds a replacement for US consumers

The June US job employment report suggests that the alleged ‘green shoots’ are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10 percent by later this summer, around August or September, and will be closer to 10.5 percent if not 11 percent by year-end. I expect the unemployment rate is going to peak at around 11 percent at some point in 2010, well above historical standards for even severe recessions.

This data indicates that US consumers are not going to their buying spree anytime soon. Someone has to convert to Consumerism sooner or later for globalization to rebound.

Nouriel Roubini: The retrenchment of the U.S. global consumer of last resort needs to be compensated by increased consumption in current account surplus countries if the world economy should grow on the same path as before the crisis. However, Japanese consumers are too weak to pick up the slack, the Germans don't want to and the Chinese are not yet wealthy enough to replace the U.S. consumer even if they manage to shift their export-led growth model. As of now, the Chinese current account surplus and savings overhang is not shrinking much. 

Bill Gross (PIMCO): There is no global replacement for the American consumer who lost at least a$15 trillion in wealth since early 2007. "Short-term policy rates will be kept low for longer than cyclical norms, and the outlook for risk assets – stocks, high yield bonds, and commercial and residential real estate will involve just that – risk. Investors should stress secure income offered by bonds and stable dividend-paying equities

Cheap is the new cool

Capitalism, US version, had been dependent on the overspending of the consumers, who were advertised to buy more things which they want or not. Capitalism has been advocating to spend more than what people earn.  However, there have been some rethinking now as books on living cheaper has gained public support lately. 

Jeff Yeager is an author whose book on cheaper lifestyle including giving up cellphones are getting wide spread acceptance.  

The thrift culture has the potential to disrupt the global economies and globalization as we know it. There are opponents for this who say the thrift is just a fad.

Soros says worst of global crisis behind us

The following are comments of Soros about the current situation of globalization/global crisis :

This is not like previous crises but marks the end of an era. The system to date had been based on the false assumption that markets can independently regain their equilibrium and that the system is self-correcting.

We need international regulations to retain international markets. This won't be easy...If we won't be able to do this... than globalization, as we now know it, will fall apart,

To deal with the current crisis,  the state must step in, give guarantees to financial institutions and increase government spending.

Since that could create a risk of hyperinflation he said the state must diminish its role once the credit system is restored.

signs of reverse migration = reversal of globalization

Signs of reverse migration from urban to rural areas have started to appear. This is a significant reversal for Globalization.

The UN warns that poor people living in cities will probably face the most severe problems in coping with the global recession, because lower export demand and reduced foreign investment are likely to hit urban jobs harder.Many migrants to urban areas would be likely to return to rural areas, it added, transferring the burden.

Incomes have also dropped "substantially" in some developing countries where families depend on remittances from relatives working abroad.With the financial crisis hitting all parts of the world more or less simultaneously, developing countries have less room to adjust, the UN agency says.

Bric Summit and the dollar

The BRIC term was coined by Goldman Sachs economist Jim O'Neill in 2001 to describe the growing power of emerging market economies - Brazil, Russia, India and China.

The BRIC nations account for 15 percent of the $60.7 trillion global economy but Goldman Sachs predicts that in 20 years time, the four countries could together dwarf the G7 and China's economy will overtake the United States in total size.

These countries had met formally in the first BRIC summit as  an attempt to give the grouping a bigger voice in the world.  The Russian President Medvedev announced that "The BRIC summit must create the conditions for a fairer world order".  Comments by Russian President Dmitry Medvedev on Tuesday suggesting a need for a global reserve currency other than the greenback highlighted the challenges facing the dollar -- and sent it sliding across the board. Just a few months ago, China had suggested how the dollar could be replaced as the world's main reserve currency. Nouriel Roubin  said the main fear haunting investors is that the United States could allow inflation to return or the dollar to devalue as a way out of its debt problems.

However the summit had ended meekly without any major announcements on the strategy regarding dollar. The lack of mention of the dollar in the final statement appeared to underline again the differing positions among the BRIC nations about how to reform the world currency system. Russia has tended to be much more outspoken against U.S. dominance of the financial system than other BRIC nations, which favor a more cautious and diplomatic approach.

Dollar seems to be going to have a longer run as the world's reserve currency.

Global economies Shrunk by huge margins

Many Countries are reporting that their economies have shrunk considerably, during the past 4 months. 

Singapore's economy has shrunk by 14.6%. 

Mexico's economy has shrunk by 8.2%

Eurozone countries economy has shrunk by 2.5%

Japan's economy has shrunk by 4%

Spains's economy has shrunk by 2.9%

While US has tightened the credit card loans today, consumer spending is all set to go down from what is today. Also, there is going to be another round of big layoffs in US due to GM and Chrysler Bankruptcies. This should be triggering another round of contraction in the global economy.  

Tough times for Globalization ahead.

India decides - Electon'09 Mandate

India has elected Dr. Manmohan Singh again as the PM. He is the first PM to return to office after a very long time.  The popular rural schemes that provide employment and loan waivers have brought in the critical votes need to enable congress win substantial seats. The urban people also believe that Congress is a better alternative to the BJP. The anti-congress vote had split into 3rd front, 4th front and 5th front (smaller parties like Vijaykanth's DMDK in Tamil Nadu, Chiranjeevi's party in AP etc.), giving a good lead for the Congress.

The mandate for the PM and the popular schemes has been translated  as a mandate for Rahul Gandhi himself as future PM. The people are being tuned to accept Rahul as the next PM whenever Manmohan Singh retires.  

Nano Housing for India

As the real estate prices have zoomed past the affordability of majority of Indian Middleclass, builders are adopting innovative strategies like reducing the height of the roofings, building single room studio apartments etc. 

Tata Group is now taking the lead in this sector also. It is launching a Nano housing project that will include properties in sizes like small one room kitchen, large one room kitchen and 1BHK. With a balanced mix of buildings and open spaces, these projects will be constructed under the guidance of Indian Green Building Council (IGBC).  Moreover, the value homes will be priced between Rs 3.9 lakh and Rs 6.7 lakh

The first township of this nationwide project will be developed inBoisar, with plans to expand into other Tier I and II markets in the country. With a Balanced mix of buildings and open spaces, these projects will be constructed under the guidance of Indian Green Building Council (IGBC).  The project will be known as "Shubh Griha Township" and will be built in Boisar, Mumbai.

I feel that having a Nano house in the bachelor stages of life, which for most people now extends to a decade, is better than having to live in a rented house (and spending one-third of one's salary).  But on the flipside, it would bring down the living standards of people where having  a two bedroom flat might mean you're a middleclass millionaire.

India in a Ring of Fire

While India has taken advantage of the globalization, its periphery - neighbouring countries have failed to do so. India's neighbours including Pakistan, Nepal, Srilanka and Myanmar are close to being "Failed States".  India now has to make strategic moves to pull its neighbours as China is already knocking on its doors. 

Home Minister Palaniappan Chidambaram says India is caught in a “ring of fire”. with War and misery blights Sri Lanka, with political ramifications in India; Bangladeshi politics remains volatile and the country eyes India with suspicion; the military junta in Myanmar is pro-China; Pakistan is wobbling under a spell of violence that has a direct bearing on India’s security.

The Economist magazine says a potential challenge to India’s rise is geopolitical (and the Nepal crisis bears that out). It says how successful a global power India becomes will depend partly on its ability to mediate and resolve the rising number of crises in its neighbourhood. 

The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization of eight countries in Southern Asia. In terms of population, its sphere of influence is the largest of any regional organization: almost 1.5 billion people, the combined population of its member states. It was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. In April 2007, at the Association's 14th summit, Afghanistan became its eighth member.

India needs to leverage on the SAARC organization and bring about a geopolitical reorganization in the region if it has to compete meaningfully with China.

Links: 

1. India's Future

2. India in a ring of fire

Globalization ka Side Effects II

Just like the report "Globalization ka Side Effects", which talked about the death of one million work-aged Russians died due to the economic shock of mass privatisation policies, it is now reported that the phenomena is going to happen in India too.

Due to globalisation and a stressful working environment hypertension threatens to wallop the work force in India, according to a survey.

The Associated Chambers of Commerce and Industry of India (Assocham) and the PricewaterhouseCoopers (PWC) in a joint report said 65 million people were affected by hypertension in 2008 and that in the years ahead it was likely to see a quantum leap of over 135 million to touch a figure of 200 million by 2015.

Threat to well-being

The desperation to protect one’s livelihood in this era of changing economy, with little medical facilities to cope with the situation, was posing a major threat to the well-being of the working force, maintained Assocham president Sajjan Jindal.

Productive years

India is losing its potentially productive years due to increasing heart diseases, strokes and diabetes in the age group of 35-60, one of the highest in the world, according to the report.

More

How does a Trillion dollar look like?

The US Bail out is said to cost around a Trillion dollars. Have you wondered how much would a Trillion Dollar look like? someone has done an illustration. Here is a visualization of how a Trillion Dollar would look like :

Here is a Hundred Dollar Note :



This is Ten Thousand Dollars :


This is a Million Dollars:


This is One Hundred Million Dollars:




This is one Billion Dollars :





This is One Trillion :


Visualized by : http://www.pagetutor.com/trillion/index.html

China is the G-2 now

China is leveraging the US Financial Crisis to the fullest as it has leapfrogged in two of the Key Industrial Segments. The Newsweek, last week, explored in a cover story, whether Shangai is the New Detroit. This week, Rana Foroohar wonders whether Shangai is also the Next Wall Street. China has become the biggest Auto Market and they are also pressing ahead with important financial reforms including launching their own version of NASDAQ and making its currency more convertible. 

A user commenting on the article, had  summed it up : China is G-2.

Excerpts from the articles :

1. Shanghai is the new Detroit

American tastes dominated the world's automotive market for a century, but all that's changing now. Today it's the increasingly well-to-do Chinese car-buyer that industry wants to woo and win, thanks to this incredible fact—China has, over the last three months running, surpassed the U.S. in terms of volume sales of automobiles.

The future of auto design was on display last week at the Shanghai Auto Show, where, in 30 football fields worth of space, international and domestic carmakers vied for the attention of Chinese consumers. The timing of the biennial event, China's oldest international auto show, was fortuitous. No one expected the Middle Kingdom to nab first place in the global auto market from America for at least another decade, but the financial crisis has had a sharp dampening effect on U.S. sales. The Chinese, meanwhile, spurred on by their government's enormous stimulus package, have kept spending. Beijing's 2009 auto sales target is 10 million units, an increase of 10 percent from 2008, and a figure that would cement its position, with an estimated 1 million more unit sales than the U.S. "No one expected China to emerge as the leading volume market this fast," says William Russo, a Beijing-based business consultant who specializes in the automotive sector. "This will give China a huge say in setting the standards and architecture for the entire industry.

If Beijing gets its way, the future will be small, green and—of course—made in China. The shock of the global financial crisis, and the resulting need to stimulate the auto sector has persuaded Beijing to dig deep into government coffers with more than $733 million to promote the rural sales of small cars and trucks (which domestic makers specialize in) and $220 million to fund and upgrade new green automotive technologies that many consider to be the wave of the future for the industry. Ultimately, Chinese planners want to create a new Detroit—a leaner, meaner, cleaner global automotive hub.

2. Shangai is the new Wall Street.

Shanghai is the new Detroit. Now, I'm beginning to wonder if it may soon be the new Wall Street. As I've written and blogged in the past, the fact that the world's top three banks by market capitalization are now Chinese isn't as big a deal as it might seem -- they are still local, commercial players, not global investment banks a la Morgan Stanley or Goldman Sachs.

Despite the market downturn, the Chinese are launching their own version of NASDAQ later this month, in order to help fund small and mid sized businesses that aren't benefiting as much from the massive stimulus package (yet still create the majority of jobs). They are also moving ahead with developing more complex securities (though not those crazy credit default swaps that tanked markets over here), and making their currency more convertible.

The Chinese could have used the financial crisis as a reason to turn their back on capital market reform -- instead, they are pushing ahead with it, and will likely gain global financial market share as a result. Wen Jiabao recently said as much when he told the Chinese that this is a moment for "more, not less" reform. It's such a cliché, but I'm reminded yet again of the fact that the Chinese use the same character to write "danger" and "opportunity."

The Indian Realty

This is a short story passed around through emails between Indian IT people. I think Indian Social Media is starting to get interesting. People are now starting to wonder about who is the real beneficiary of the IT boom in India.

ONE BEDROOM APARTMENT... .....

WRITTEN BY AN INDIAN SOFTWARE ENGINEER...

 A Bitter Reality

As the dream of most parents I had acquired a degree in
Software Engineering and joined a company based in USA, the
land of braves and opportunity. When I arrived in the USA , it
was as if a dream had come true.


Here at last I was in the place where I want to be. I decided I
would be staying in this country for about Five years in which
time I would have earned enough money to settle down in India .

My father was a government employee and after his retirement,
the only asset he could acquire was a decent one bedroom apt.


I wanted to do some thing more than him. I started fe el ing
homesick and lon el y as the time passed. I used to call home and
speak to my parents every week using cheap international phone
cards. Two years passed, two years of fast food at McDonald's and
pizzas  and 2 years watching the foreign exchange
rate getting happy whenever the Rupee value went down.

Finally I decided to get married. Told my parents that I have
only 10 days of holidays and everything must be done within
these 10 days. I got my ticket booked in the cheapest flight.
Was jubilant and was actually enjoying hopping for gifts for
all my friends back home. If I miss anyone then there will be
talks. After reaching home I spent home one week going through
all the photographs of girls and as the time was getting
shorter I was forced to s el ect one candidate.


In-laws told me, to my surprise, that I would have to get
married in 2-3 days, as I will not get anymore holidays. After
the marriage, it was time to return to USA , after giving some
money to my parents and t el ling the neighbors to look after
them, we returned to USA .


My wife enjoyed this country for about two months and then she
started fe el ing lon el y. The frequency of calling India
increased to twice in a week sometimes 3 times a week. Our
savings started diminishing.



After two more years we started to
have kids. Two lov el y kids, a boy and a girl, were gifted to us
by the almighty. Every time I spoke to my parents, they asked
me to come to India so that they can see their grand-children.


Every year I decide to go to India ... But part work part
monetary conditions prevented it. Years went by and visiting
India was a distant dream. Then suddenly one day I got a
message that my parents were seriously sick. I tried but I
couldn't get any holidays and thus could not go to India ... The
next message I got was my parents had passed away and as there
was no one to do the last rights the society members had done
whatever they could. I was depressed. My parents had passed
away without seeing their grand children.


After couple more years passed away, much to my children's
dislike and my wife's joy we returned to India to settle down.
I started to look for a suitable property, but to my dismay my
savings were short and the property prices had gone up during
all these years. I had to return to the USA ...


My wife refused to come back with me and my children refused to
stay in India ... My 2 children and I returned to USA after
promising my wife I would be back for good after two years.

Time passed by, my daughter decided to get married to an
American and my son was happy living in USA ... I decided that
had enough and wound-up every thing and returned to India ... I
had just enough money to buy a decent 02 bedroom APT in a
w el l-dev el oped locality.


Now I am 60 years old and the only time I go out of the APT is
for the routine visit to the nearby temple. My faithful wife
has also left me and gone to the holy abode.

Sometimes



I wondered was it worth all this?



My father, even after staying in India ,



Had a house to his name and I too have
the same nothing more.

I lost my parents and children for just ONE EXTRA BEDROOM.

Looking out from the window I see a lot of children dancing.
This damned cable TV has spoiled our new generation and these
children are losing their values and culture because of it. I
get occasional cards from my children asking I am alright. W el l
at least they remember me.


Now perhaps after I die it will be the neighbors again who will
be performing my last rights, God Bless them.



But the question
still
remains 'was all this worth it?'

I am still searching for an answer...... .......... ..!!!



START THINKING



IS IT JUST FOR ONE EXTRA BEDROOM???



LIFE IS BEYOND THIS .....DON'T JUST LEAVE YOUR LIFE ........

START LIVING IT ........

LIVE IT AS YOU WANT IT TO BE ........

All Slumdogs are not millionaires

India's booming economy has helped marginalise the growing number of impoverished city dwellers while lifting millions out of poverty, a government report by Professor Amitabh Kundu, the chief coordinator of the "India Urban Poverty Report 2009", which was released in New Delhi.

"When you're watching the process of development, where you stand is very important -- whether you see the speed of the engine or you get overwhelmed by the smoke".

The urban poor accounted for 25.7 percent of the country's total urban population in 2004-5 compared with 49.01 percent in 1973-74, said the report which defines urban poor as anyone living on less than 20 rupees ($.41) a day. However, the rate of overall decline in poverty slowed from 0.82 percentage points per year from 1973-74 to 1983-84, to 0.61 percentage points from 1993-94 to 2004-05, the report said, revealing the flip-side of the country's economic success. India's economy grew at around 9 percent in each of the past three years. "Certain aspects of economic development and the changes associated strongly with the process of urbanisation in India have created a backwash effect for the poorer sections of the urban community," the report said. The "backwash" is also blamed on the decline or relocation of traditional industries such as textiles and steel. "The urban workers are increasingly being pushed into the informal sector," the report said.

Mass slum clearances have driven workers, such as those in domestic service, away from their place of work and pushed many into crime, the report said. "When the urban poor are pushed away from the place of his/her livelihood, the result is complete loss of livelihood. As a result, many of the poor are pushed into crime."

Source : Boom marginalises India's urban poor-report