World is the stage - Tales of Globalization

India to topple Japan as world's 3rd-largest economy

2011-09-22T05:21:00.000-07:00

India might become the world's third largest economy in 2011 by overtaking Japan in terms of gross domestic product (GDP) measured according to the domestic purchasing power of the rupee, otherwise called purchasing power parity.

India is now the fourth-largest economy behind the US, China and Japan. Numbers from 2010 show that the Japanese economy was worth $4.31 trillion, with India snapping at its heels at $4.06 trillion. But after March's devastating tsunami and earthquakes, Japan's economy is widely expected to contract while India's economy will grow between 7% and 8% this fiscal. "India should overtake Japan in 2011 to become the third-largest economy in the world at purchasing power parity," said Sunil Sinha, head of research and senior economist at Crisil.

IMF forecasts show India and Japan neck-to-neck in 2011, but the disaster in Japan has brought the event forward. "Were it not for the earthquake and tsunami, India would have overtaken Japan in around 2013-14," said Sinha.

The purchasing power parity (PPP) method measures the size of an economy by levelling price differences between countries that occur in the process of conversion to a single currency.

Under this method, a dollar should be able to buy the same amount of goods anywhere in the world and exchange rates should adjust accordingly.

The Economist's Big Mac Index, which takes the price of a Big Mac burger across 120 countries to calculate the 'real' price of its currency, is a crude way to measure PPP. India was included in the index recently. It showed that the Indian rupee was undervalued by 53% against the US dollar in August.

Earlier, a report by consultant PwC suggested that the Indian economy would surpass the Japanese economy in 2012. The IMF expects the Japanese economy to contract 0.7% this year while India is expected to grow 8.2%. A bigger economy could also give the government additional clout and bargaining power overseas.

"A bigger economy would also mean more clout in international forums," said Madan Sabnavis, chief economist at ratings firm Care.

Rich getting Richer,Poor getting Poorer and the middle classe? - disappearing

2011-09-18T07:41:00.000-07:00

How is the middle class is faltering in the US - from howtheworldworks :

The Wall Street Journal reported on Monday that big American consumer product companies are beginning to split their product offerings between retail lines aimed either at the low end or the high end.

For generations, Procter & Gamble Co.'s growth strategy was focused on developing household staples for the vast American middle class.

Now, P&G executives say many of its former middle-market shoppers are trading down to lower-priced goods -- widening the pools of have and have-not consumers at the expense of the middle....

A wide swath of American companies is convinced that the consumer market is bifurcating into high and low ends and eroding in the middle. They have begun to alter the way they research, develop and market their products.

Food giant H.J. Heinz Co., for example, is developing more products at lower price ranges. Luxury retailer Saks Inc. is bolstering its high-end apparel and accessories because its wealthiest customers -- not those drawn to entry-level items -- are driving the chain's growth.

But here's the kicker:

To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20 percent rise in income disparity over the past 40 years, according to the U.S. Census Bureau.

"We now have a Gini index similar to the Philippines and Mexico -- you'd never have imagined that," says Phyllis Jackson, P&G's vice president of consumer market knowledge for North America. "I don't think we've typically thought about America as a country with big income gaps to this extent."

The new numbers from the Census Bureau peg 2010's Gini coefficient at 0.469, which, statistically speaking, doesn't represent a significant change in income inequality as compared to 2009. However, the Bureau notes, "changes in shares of aggregate household income by quintiles showed a slight shift to more inequality." So the basic trend is still depressingly in place.

It's not hard to understand what is happening here. The middle class, squeezed by globalization and advances in technology, is sinking backward, while the rich benefit disproportionately from gains in trade and excessively accommodative tax policy.

My Take: With Oil Price and Interest Rates hikes happening every month, it is soon going to be Indians turn.

Reverse Colonialism - Turn of the tide in globalization?

2011-09-18T07:12:00.000-07:00

What a twist of fate and churn in the globalization's history.. Snippets from an interesting article by Charles Payne..

Europe's drama has taken center stage as we wait for the next round of fireworks from the Fed, the Super Committee, White House (big refinance deal on drawing board) and the update on jobs data (shouldn't be hard to be zero). I find it amazing that markets settled down as rumors of a China bailout persisted. One Chinese official called it absurd since it would mean a country with per capita income of $4,000 is bailing out nations with per capita incomes of $40,000.

It goes to show just what can be done when people buckled down for decades and do with less, save half the money they make even when it's pennies, and wait until they have trillions in the bank to make their move. It also goes to show just what can be done when people feel entitled and spend like crazy for decades because they would never do with less or save any money they make or receive even when it's billions, so they gorge until there's nothing and then make their move. These moves seem to be colliding. As those decadent European nations that squandered greatness and fortunes are now sniffing around up and coming nations are being looked to for bailouts.

But, there is also a lesson about hunger. Greece, Italy, Spain, and Portugal have glorious histories of global domination, but as their dominance faded they lived a lie through political systems designed to make everyone feel a sense of power when in fact all the real power of free markets, entrepreneurship, and ambition was being snuffed out. Who's going to make up the collision that bails America out twenty years from now? Mexico, Turkey, Singapore, and Indonesia are on the right track to be our BRICS rescue team by then. The headlines will read: "MITS Bailout USA!"

Reportcard From them Master of Globalization Theory himself : All Together Now By THOMAS L. FRIEDMAN

2011-08-29T05:39:00.000-07:00

HOLD onto your hats and your wallets. Since the end of the cold war, the global system has been held together to a large degree by four critical ruling bargains. Today all four are coming unstuck at once and will need to be rebuilt. Whether and how that rebuilding happens — beginning in the U.S. — will determine a lot about what’s in your wallet and whether your hat flies off.

Now let me say that in English: the European Union is cracking up. The Arab world is cracking up. China’s growth model is under pressure and America’s credit-driven capitalist model has suffered a warning heart attack and needs a total rethink. Recasting any one of these alone would be huge. Doing all four at once — when the world has never been more interconnected — is mind-boggling. We are again “present at the creation” — but of what?

Let’s start with the Middle East, the world’s oil tap. Libyans just joined Tunisians, Egyptians and Yemenis in ousting their dictator, while Syrians and Iranians hope to soon follow suit. In time, virtually every Middle East autocrat will be deposed or forced to share power. The old model can’t hold. That model was based on kings and military dictators capturing the oil revenue, ensconcing themselves in power — protected by well-financed armies and security services — and buying off key segments of their populations. That lid has been blown off by an Arab youth bulge that today can see just how everyone else is living and is no longer ready to accept being behind, undereducated, unemployed, humiliated and powerless. But while this old Middle East system — based on an iron fist and a fistful of petro-dollars holding together multiethnic/multireligious societies — has broken down, it will take time for these societies to write their own social contracts for how to live together without an iron fist from above. Hope for the best, prepare for anything.

Farther north, it was a nice idea, this European Union and euro-zone: Let’s have a monetary union and a common currency but let everyone run their own fiscal policy, as long as they swear to work and save like Germans. Alas, it was too good to be true. Large government welfare programs in some European countries, without the revenue to finance them from local production, eventually led to a piling up of sovereign debt — mostly owed to European banks — and then a lender revolt. The producer-savers in northern Europe are now drawing up a new deal with the overspenders — the PIIGS: Portugal, Italy, Ireland, Greece and Spain. It is unlikely that the Germans would just break out of the European Union, since a good chunk of their exports go to those overspending, uncompetitive countries. Instead, the northern Europeans are trying to force stronger, rule-based discipline on the PIIGS. But how much more austerity can these countries absorb, especially if there are further social stresses from deeper recessions? More than Londoners will take to the streets. One way or another, the European Union is going to get smaller or tighter, but in the process it could go through a chaotic, world-shaking transition that is not priced into the market yet.

Going East, China has been relying on a model built on a deliberately undervalued currency and export-led growth, with low domestic consumption and high savings. This has allowed the Communist Party to sustain a unique bargain with its people: We give you jobs and rising standards of living, and you give us power. This bargain is now under threat. Persistent unemployment in China’s American and European markets is making Beijing’s undervalued-currency/low-consumption/high-export model less sustainable for the world. China also has to get rich before it gets old. It has to move from two parents saving for one kid, to one kid paying for the retirement of two parents. To do that, it has to move from an assembly-copying-manufacturing economy to a knowledge-services-innovation economy. This requires more freedom and rule of law, and you can already see mounting demands for it. Something has to give there.

As for America, we’ve thrived in recent decades with a credit-consumption-led economy, whereby we maintained a middle class by using more steroids (easy credit, subprime mortgages and construction work) and less muscle-building (education, skill-building and innovation). It’s put us in a deep hole, and the only way to dig out now is a new, hybrid politics that mixes spending cuts, tax increases, tax reform and investments in infrastructure, education, research and production. But that mix is not the agenda of either party. Either our two parties find a way to collaborate in the center around this new hybrid politics, or a third party is going to emerge — or we’re stuck and the pain will just get worse.

When the world is experiencing so many wrenching changes at once — with already high unemployment and weak economies — the need for America, the most important pillar of all, to be rock solid is greater than ever. If we don’t get our act together — which will require collective action normally reserved for wartime — we are not going to just be prolonging an American crisis, but feeding a global one.

annarchy : when graft hit the top in India

2011-08-29T05:17:00.000-07:00

The Economic Clash of the Civilizations - Why the US debt crisis will hit us all

2011-08-08T23:19:00.000-07:00

This is an excellent article by the noted Chennaite Economist M R Venkatesh in Rediff.com

The government is on daily wages.

No. That is not a cynical comment by a political commentator on the Indian government. It is a factual interpretation of the state of affairs about the United States government.

The reason for the same is benumbing as much as baffling -- we are actually facing the once unthinkable prospect of the US defaulting on its debt obligations.

Naturally, this prospect raises fundamental questions. How could the world's sole superpower run the risk of defaulting on its debt obligations?

Is the US government heavily dependent on debt to fund its deficits? Why? And if so, what is its external component?

Crucially what happened to the economic theories developed by Nobel laureates -- no less -- and marketed with missionary zeal by various multilateral institutions led by the US Treasury?

Or does the malaise run far deeper that it seems on superficial examination. After all, the current imbroglio in the US is a constitutional issue -- apparently a legal bar limits the US government from contracting further debt (which already stands at a gargantuan $14.29 trillion).

And if the US lawmakers agree to raise the borrowing limit will it be business as usual, till the new limit is reached. At least this is what the world of finance hopes and prays. (Meanwhile, US President Barack Obama said late on Sunday that top lawmakers have reached an agreement to reduce the budgetary deficit and avert a debt default that would have had a 'devastating' effect on American economy.)

Honestly, the issue is not as simple as it seems on first blush. Definitely, it is not a pure legal issue as the political fraternity in the US would like us to believe. Nor is it merely political or ideological as most economists would like us to believe.

And definitely it is not simple economics as most believe and would like us to believe. It is legal, political, economics and possibly much more.

Distanced, discredited, disowned

To appreciate what is stated above it is important to visit the root assumptions that govern modern economics in the three-decade period beginning the early eighties.

In fact, this is a subject of great debate amongst macroeconomists in recent times. According to one economist from Harvard, the past 30 years of macroeconomics training at American and British universities were a 'costly waste of time'. Yes, a costly waste of time!

The Economist, in an article titled The State of Economics (July 16, 2009) put the entire issue in proper perspective when it stated that ' . . . the macroeconomic crisis of the past two years is also provoking a crisis of confidence in macroeconomics.'

The article goes on to add, 'These internal critics argue that economists missed the origins of the crisis; failed to appreciate its worst symptoms; and cannot now agree about the cure. In other words, economists misread the economy on the way up, misread it on the way down and now mistake the right way out.'

At the core of the present conundrum are certain fundamental theories of macroeconomics -- much of which was debated, celebrated and even imposed on others -- without even considering the possibility that such ideas could be plainly wrong or unworkable in entirely different circumstances, countries or cultures.

Call it confidence or blame it on arrogance. Call it economic fundamentalism, or blame it on some conspiracy. The fact remains that most of the macroeconomic theories of the past three decades ensured cannibalisation of alternative ideas in the discipline of macroeconomics.

In the process any contrary economic ideas were put down ruthlessly all over the world.

It all began in the early eighties with the advent of Ronald Regan as the President of the US that spawned a new brand of economics -- Reagonomics -- which placed supply at the centre of economics.

And to effectuate this idea, tax cuts (so that an individual could have more money in his hands) and tariff cuts were carried out (which allowed globally access to goods at competitive rates).

Finally, interest rates were lowered to provide the last mile connectivity.

All this is good economics, except for the fact that this was overdone. And that can be simply explained. We need to produce to keep the wheels of economics moving.

Out of the production that is generated we need to consume a portion and leave the balance as savings. Savings are for investment. And investment is for production.

All this was turned on its head during that past 30 years or so by mainstream economists. Consumption was by design turned into a virtue.

In the process, explained through models, economics became extremely complex, complicated and jargonised.

In a remarkable coincidence, Reaganomics coincided with the rise of East Asia. Several East Asian countries had over the eighties and nineties, thanks to their economic policies, became huge suppliers of cheap yet quality goods to the global -- read the US markets.

Further, in the aftermath of Asian currency crisis, many Asian countries discovered the virtues of a weak currency and engaged in 'competitive devaluation'.

Under this scenario, many countries simply leveraged their weak currency vis-a-vis the US dollar to gain access to global markets.

While Asian countries continue to export, the US continues to import. Obviously, the current account deficit of the US becomes the current account surplus of other exporting countries, viz. China, Japan, as well as other oil producing and exporting countries.

Naturally, this arrangement -- where some countries continue to export and a few who continuously import and consume -- has created serious imbalances within the global economy.

Commenting on this paradigm, Reserve Bank of India Governor D Subbarao stated in a lecture in New Delhi on July 31, 2009: 'Global macro imbalances got built up because of the large savings and current account surpluses in China and much of Asia in the wake of the East Asian crisis a decade ago. These were mirrored by large increases in leveraged consumption and current account deficits in the US.'

'In short, Asia produced and America consumed. There is a raging debate on what was the cause, and what the effect -- the US consumption boom or the Asian savings glut?, he said.

'Regardless, the bottomline is that one was simply the mirror of the other and the two share a symbiotic relationship,' he concluded.

The key words here are 'symbiotic relationship'. It is to be noted that this symbiotic relationship also goes by the sexed-up appellation of globalisation -- a mechanism that translates national imbalances into global imbalances, national problems into global ones.

It is therefore a matter of time that the US debt crisis spirals into a global one.

Sensing that this macroeconomic model has run its full course, the Chinese in their approach to the Twelfth Five-Year Plan (which more or less coincide with our Five-Year Plans) have sought to rebalance their economy by increasing domestic consumption and simultaneously placing less reliance on exports.

Crucially, they plan to revalue their Yuan to more realistic levels. In short, they seem to distance themselves from what are the main causes for their spectacular growth over the past three decades.

The curse of excessive savings or consumption

In this scenario, economists have now sought to blame Alan Greenspan, the former Federal Reserve chairman, for the economic crisis.

According to many, the 'irrational exuberance' exhibited by the US financial markets during the period leading to the 2008 financial crisis was an outcome of a lax monetary policy and extremely low interest rates.

Greenspan in turn seeks to defend himself. In a paper, titled The Crisis and presented in April 2010, Greenspan states: 'A large segment of the erstwhile Third World nations, especially China, replicated the successful economic export-oriented model of the so-called Asian Tigers: fairly well-educated, low-cost workforces joined with developed-world technology, protected by an increasing rule of law, unleashed explosive economic growth.'

Further, Greenspan says, 'In the developing world, consumption restrained by culture and inadequate consumer finance could not keep up with the surge of income and, as a consequence, the savings rate of the developing world soared from 24% of nominal GDP in 1999 to 34% by 2007, far outstripping its investment rate.'

But the moot point is if the culture in developing countries is the cause of excessive savings, as Greenspan argues, then should not culture be the cause of excessive consumption in the West too? Strangely Greenspan is silent on this issue.

This is where the Chinese are facing significant difficulties in rebalancing their economy. Used as they are to excessive savings (due to cultural factors) it is as difficult to make the Chinese spend as much as it is difficult to get an American not to spend!

Now the world of macroeconomists would see for itself that excessive spending is as much a challenge as excessive savings.

Macroeconomists who had marketed economic theories as models and models as gospel are loathe to realise this fundamental truth.

Naturally they stand discredited, even in their own eyes. The US debt crisis is merely an extension of the crisis of modern economics -- a discipline that seems to have lost respect for discipline.

Certainly, the US will shortly face the music on account of its excessive debt. So will those countries that saved excessively.

The world is divided even to this day over the role of Greenspan in triggering the economic crisis of 2008.

Nevertheless, he needs to be congratulated, atleast for one issue: he has linked economics to culture for the first time in 30 years.

Will it trigger a rewriting of economics all over once again?

My Comment : or, Can the economic clash of the civilizations spilover to political domain too?

U.S. AAA downgrade could accelerate dollar decline

2011-08-05T20:23:00.000-07:00

In a Huge Reversal of Fortunes, The US has lost its AAA rating.

Already reeling from low interest rates, slow economic growth, and foreign investors eager to diversify away from U.S. assets, the loss of AAA status could cement the view the dollar is no longer the safest harbor in a troubled world.

The risk of a downgrade remains real even after Washington's $2.1 trillion budget savings deal, since it fell well short of the $4 trillion Standard & Poor's said would be enough to support the AAA rating with a stable outlook.

The S&P 500 absorbed its worst one week decline since November 2008 as concerns grew about the inability of world political leaders to deal with the European debt crisis or the faltering U.S. economic recovery.

And even though the S&P and other U.S. stock indices closed Friday either modestly higher or lower, the flight to safety in the form of cold hard cash is one that seems unlikely to end anytime soon.

For years, the dollar has acted as the world's reserve currency, an international store of value for central banks.

However, the fact the other safe-haven currencies are gaining at the expense of the dollar suggests investors' views may already be changing, perhaps in anticipation of a downgrade or at least a tough fight to hang on to AAA.

THE JAPAN EXPERIENCE

The fact that the yen has retained much of its value in the face of a Japanese downgrade over the past decade, including the most recent action by S&P earlier this year, does not suggest the dollar would be similarly immune, analysts said.

The yen is not the world's primary reserve currency, representing just under 4 percent of global reserves. The dollar is, with its share of global reserves at 60.7 percent.

Is Gold set for another steep rise?

The Rise of Contract Farming

2011-07-21T09:14:00.000-07:00

Wallstreet Journal India report : major revolution brewing in Indian Agriculture ?

Keypoints in the report:

Contract farming — businesses signing contracts with farmers to grow a specific crop, even a specific seed variety, and guaranteeing buy-back of the produce at an agreed price or price range — holds the promise that the next generation of yield improvements could come through efforts from the private sector.

PepsiCo was one of the earliest promoters of the contract-farming model in India. In 1997, it set up a tomato processing plant in Punjab, not a traditional tomato growing area, and started tying up with local farmers to grow tomato varieties needed for ketchup.

Although PepsiCo has since exited tomato processing, it still works with 12,000 farmers, primarily to procure potatoes for potato chips.

SAB Miller India — an Indian subsidiary of the global beer group — required 75,000 tons of barley last year for its brewing operations. But, in India, barley is mainly grown as animal feed and the local variety is not suited for extracting malt, a key intermediate step in brewing beer.

While procuring from local mandis in the main barley producing regions — Rajasthan, Uttar Pradesh, Haryana and Uttarakhand — SAB Miller found that a lack of uniformity in grain size and mixing of different varieties of barley increased processing costs and resulted in lower quality beer.

In response, SAB Miller launched an initiative to provide higher-quality certified seeds, training and extension services to teach farmers best practices in growing barley.

However, it should not be thought of as a panacea to the web of problems facing the Indian agricultural sector. Private initiative cannot be expected to fix basic, widespread problems including groundwater depletion, excessive fertilizer use and farmer suicides due to indebtedness; those still require policy reforms and concerted public interventions. Perhaps most importantly, in the context of declining public investments, the government needs to speed up liberalization measures to attract greater private investment into the agricultural sector.

It's the economy stupid - or It's the Political/Military Power?

2011-05-18T19:30:00.000-07:00

Michael Snyde of the business insider's blog on the economic collapse of the US is providing a wealth of information on the economic undercurrents of the global economy.Snyde's arguments are from "It's the economy stupid" standpoint.

Even the well meaning Obama has resorted to political gimmicks like killing Osama bin Laden to sustain himself. He seems to tell everyone that "It's the political/military showmanship, stupid".

The military and political might of the US is what sustaining the US's global standing today. Technological leadership is also a crucial factor. "It's the economy, stupid" argument seems to be valid only during the elections in the US.

Can the US reshape its economy just by its political power just like it is imposing its will on other countries.
or, the next country to be invaded by the US military would the USA itself.

If Anna Hazare is the new Gandhi, who is the new Nehru?

2011-04-12T21:54:00.000-07:00

Sonia Gandhi had finally blinked and accepted for a joint committee for drafting the Lok Pal Bill. With this win, everyone accepts that Anna Hazare is the new Gandhi. I happenned to see an excellent comments from the public on the television. Here are some:

If Anna Hazare is the new Gandhi, who is the new Nehru?

Kapil Sibal had told that Large Heartedness of Sonia and Manmohansingh had made the Government accept Anna Hazare's demands. Is it reallyLarge Heartedness of Sonia and Manmohansingh or Large heartedness of the People?

Ministers are like hired drivers for a Car. If the driver thinks that he is the master of the car and is driving recklessly, can the owners/people tolerate that?
- Chetan Bhagat.

Anna Hazare - Ray of Hope

2011-04-06T08:29:00.000-07:00

Anna Hazare's Hunger Strike is one of the rarest of the rare moments in Indian Political History. The spontaneous show of support across the country is really a revelation to all the Indians. Anna Hazare has the moral strength to mobilize Indians.

My Comments on this movement : Manmohan Singh's True Colors is now in full view for all the Indians to see. His rejection of the Lok Pal Bill reveals his real self. People like him who wear the deer's skin are more dangerous than the overtly carnivorous A.Rajas of the world.

Twitter, Facebook and all of social media are now in action in India too. Is this India's Moment of Social Reform ?

How will America handle the fall of its Middle East empire?

2011-02-28T04:41:00.000-08:00

Highlights from Telegraph Blog article:

1. Empires can collapse in the course of a generation. At the end of the 16th century, the Spanish looked dominant. Twenty-five years later, they were on their knees, over-extended, bankrupt, and incapable of coping with the emergent maritime powers of Britain and Holland. The British empire reached its fullest extent in 1930. Twenty years later, it was all over.

Today, it is reasonable to ask whether the United States, seemingly invincible a decade ago, will follow the same trajectory. America has suffered two convulsive blows in the last three years. The first was the financial crisis of 2008, whose consequences are yet to be properly felt. Although the immediate cause was the debacle in the mortgage market, the underlying problem was chronic imbalance in the economy.

2. Just as 1989 saw the collapse of the Russian empire in Eastern Europe, so it now looks as if 2011 will mark the removal of many of America’s client regimes in the Arab world. It is highly unlikely, however, that events will thereafter take the tidy path the White House would prefer. Far from being inspired by Twitter, a great many of Arab people who have driven the sensational events of recent weeks are illiterate. They have been impelled into action by mass poverty and unemployment, allied to a sense of disgust at vast divergences of wealth and grotesque corruption. It is too early to chart the future course of events with confidence, but it seems unlikely that these liberated peoples will look to Washington and New York as their political or economic model.

3. the world is changing faster than we know.

US and Europe doing damage control?

2011-02-27T20:49:00.000-08:00

Suddenly the US and Europe have become pro-democratic and are opposing the Gaddafis and Mubaraks of the world. This reminds me of Sonia Gandhi & Rahul Gandhi's comments on how corruption is a big threat for India.

All the politicians, all over the world are same.

Ha, I have now become middle aged guy.

Carry Trades Running Away (with the money)

2011-02-09T21:16:00.001-08:00

When the markets tanked (Sensex at 17,000 )sometime back ,Carry Traders came in and pushed it up to (Sensex - 21,000). They also pushed up the inflation in entire Asia. Now after Eyptian Crisis (fueled by inflation), the Carry Traders are now back to home. Thanks to them, the Sensex has tanked again to 17,000 levels.

Who is to pay for the difference of (21,000 - 17,000)? Poor Middle Class Indians, mainly due to inflation.

This brings me to remember the monkey story about the stock markets. Have you heard it?

Egyptian Mummy is back in Action

2011-01-29T01:49:00.001-08:00

As US has successfully exported its economic problem to other countries, it is now coming back to it
in politically. It seems that the first of the countries that are feeling the heat of the inflation are its key allies, like Egypt. Now in many of the countries inflation is spilling into political turmoil, so intensive that even 30-40 year old regimes are threatened.

Back in India, We are having the most cynical of political situations. Rahul Gandhi, member of the political family in power, is calling on people to change the System instead of keep on shouting..

Mubarak, don't call Obama on how to manage the situation.. Call Rahul Gandhi for some real advise..

Emerging economies caught in inflation dilemma

2011-01-26T04:52:00.000-08:00

Analysis : Emerging economies, seen as the big hope for global growth this year, are caught in a tricky dilemma: let inflation rip and hurt stability or raise rates and risk stalling their economies.

Ladies and Gentleman, this is the way through which America has once again escaped its problems. Now it has outsourced the Inflation threat to other countries and is cooling off happily as usual.

When will Indians and Chinese stand up to this?

Inflation as a ploy : No tax worse than inflation: Chidambaram

2011-01-09T21:08:00.000-08:00

Read the comment by Chidambaram about Inflation:
Concerned over high inflation, Union Home Minister P Chidamabaram on Wednesday expressed doubt on whether the government had all instruments to check price rise. " inflation is high, food inflation is very high... we are not sure whether we have all the tools in hands to control food inflation," Chidambaram said at a function organised by Skoch consultancy.

I think that Congress is using Inflation as a ploy to divert public attention from 2G scam. I should concede that this ploy has worked wonderfully. Is the public punished for talking too much?

WikiLeaks' Most Terrifying Revelation: Just How Much US Government Lies to its own citizens

2011-01-05T23:22:00.000-08:00

Try as I may I can not escape the sound of suffering. Perhaps as an old man I will accept suffering with insouciance. But not now; men in their prime, if they have convictions are tasked to act on them."

-- Julian Assange, 2007 blog entry

Do you believe that it is in Americans' interest to allow a small group of U.S. leaders to unilaterally murder, maim, imprison and/or torture anyone they choose anywhere in the world, without the knowledge let alone oversight of their citizens or the international community? And, despite their proven record of failure to protect America -- from Indochina to Iran to Iraq -- do you believe they should be permitted to clandestinely expand their war-making without informed public debate? If so, you are betraying the principles upon which America was founded, endangering your nation, and displaying a distinctly "unamerican" subservience to unaccountable authority. But if you oppose autocratic power, you are called to support Wikileaks and others trying to limit U.S. Executive Branch mass murder abroad and failure to protect Americans at home.

These two issues became officially linked for the first time when former U.S. Afghan commander General Stanley McChrystal explicitly stated that the murder of civilians increases rather than decreases the numbers of those committed to killing Americans, and actually implemented policies -- since reversed by General Petraeus -- to reduce U.S. murder of civilians. McChrystal said that “for every innocent person you kill, you create 10 new enemies." By so doing he made it clear that killing civilians is not only a moral and war crimes issue, but -- in today's interdependent world -- also threatens U.S. national security.

Source : Alternet.org

Happy New Year 2011 !!!

2010-12-31T07:19:00.000-08:00

Year of RTI and RTI activists

2010-12-28T20:50:00.000-08:00

2010 will be remembered as the Year of RTI. Thanks to the idealism of RTI activists who have taken on the corruption malaise in the Indian Polity. They have proved once again that Idealists too can win sometimes. It was heartwarming to see people like A. Raja, Karunanidhi, Kanimozhi and the entire congress party cornered by these "commoners who doesn't matter" in Indian Society.

India is a banana republic - Ratan Tata

2010-12-01T21:23:00.000-08:00

What is a Banana Republic ?

According to wikipedia:

Banana republic is a term that refers to a politically unstable country dependent upon limited agriculture (e.g. bananas), and ruled by a small, self-elected, wealthy, and (but not necessarily) corrupt politico-economic clique.[1] The original concept of banana republic was a direct reference to a "servile dictatorship" that abetted (or supported for kickbacks) the exploitation of large-scale plantation agriculture, especially banana cultivation.[1] As a political science term banana republic is a descriptor first used by the American writer O. Henry in Cabbages and Kings (1904), a book of related short stories derived from his 1896–97 residence in Honduras, where he was hiding from the U.S. law for bank embezzlement in the U.S.[2]

We should all thank Ratan Tata for this insight on Indian Condition

Media has taken the CAG reports little too seriously

2010-11-16T19:09:00.000-08:00

This is the statement by our Prime Minister Dr. Manmohan Singh. The CAG report has been used by the media as the Fodder to chewn on and none of the politicians could question the integrity of the source. That has been the issue for the Congress.

Another important point that has been mooted by the media. It was only the media that was interested in exposing the Scam and BJP was very relucntant in pursuing it vigourously in the early stages.

A Raja Resigns : Trial by Media

2010-11-15T06:40:00.000-08:00

A. Raja had at last resigned from his post of Union Telecom Minister after severe pressure. A. Raja had been very arrogant dodging the media after the scam had broken about. It appeared that Raja thought that the media (and general public) are simply dogs barking at the sun. After all, he had seen many many politicians get away with the graft cases all the time. But the politicians had blinked this time. What changed?

The Media has made severe damage to the ultimate power seat (the Gandhis) for their silence. The Gandhis blinked once before also - in the Niyamgiri case. The Media industry will be seen in a different light from now on.

Will the Fourth Estate fight and win against the crony capitalism?

Indian Dreams and Chinese Reality

2010-11-13T22:33:00.000-08:00

The Grandeur of CWG Opening made Indians thought that we are able to execite wpr;d class events. When Indian athletes won medals in CWG 2010, people thought that India has arrived as a Sports Giant. It includes me also.

But the bitter truth has hit us on the first day of the Asian Games 2010. The Grandeur of the Opening Ceremony painfully reminded us how mediocre was our ceremnony when compared to world standards.

The Reality of Indian Dreams rests in the Medal Count in China..

India's Greatest Threat - Populism vs Good Governance

2010-11-11T20:19:00.000-08:00

I read an interesting and thought provoking article about Populism in TOI today. All the political parties in India have been engaging in the policy of giving freebies for votes under the guise of being Pro-Poor. This has grown to the extent that one has to wonder whether India has three different systems - Capitalism (for rich), Socialism (for middle class) and Communism (for the poor) all simultaneously existing together. How long will the party go on like this?

Not for indefinite period for sure.Mainly due to these policies, Many of the states of India are heavily in debt to the tune of laks of crores, not unlike the United States. As the US has come to realize, the laws of economics will one day catch up with these governments.

Solution to Currency War : Back to Gold Standard

2010-11-08T20:49:00.000-08:00

World Bank President Robert Zoellick's Solution for Currency Wars seems to be back to Gold Standard.

Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank president Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G20 summit. Writing in the Financial Times, Zoellick called for a "Bretton Woods II" system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.

The former US trade representative, who served in several Republican administrations, said such a move "is likely to need to involve the dollar, the euro, the yen, the pound and (a yuan) that moves towards internationalisation and then an open capital account. "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values," he added.

Those who are familiar with the Gold Standard are very much against it and say that this economically stagnating and suffocating system does not allow more wealth (progress) into the system as more money cannot come into the system. Critics also point to the growth of Gold Cartels who can easily manipulate the whole economic system and that Gold Standard was responsible for the first two world wars.

Are we jumping from frying pan to the fire?

2010-10-29T05:08:00.000-07:00

The India growth story has been repeated by everyone. There are arguments as to whether India's GDP would grow at 8.5% or 9% or higher. Numbers are playing a key game. Therefore, it is interesting to note that the numbers for the standard of living in the country give a different picture altogether. While GDP has been growing, but then so has the population of the country. As a result, India's GDP per person, which is an indicator for the standard of living, actually ranks at amongst the lowest in the world.

Source : EquityMaster

Quantitative Easing, Currency Wars and its Global Impact

2010-10-27T21:21:00.000-07:00

The US is initating a Global Currency War with its Quantitative Easing. The inflation that is supposed to happen in US due to Quantitative Easing is not happenning there but it is happening everywhere else. The FDI dollars are inflating the Stock and Commodity Prices stroking the inflation in India. Subba Rao, RBI Governer, says there is a hidden cost in maintaining the Dollar Rupee Exchange Rate.. Are Countries like India indirectly paying for the US excesses by trying to maintain the currency rates..

India and QE

India, like many other emerging economies, is finding it tough to cope with huge capital inflows as investors from the West seek higher returns in these markets, given their robust growth.

“The biggest problem thrown up by capital flows is currency appreciation, which erodes export competitiveness. Intervention in the forex market to prevent appreciation entails costs. If the resultant liquidity is left unsterilised , it fuels inflationary pressures. If the resultant liquidity is sterilised, it puts upward pressure on interest rates which, apart from hurting competitiveness, also encourages further flows,” Mr Rao said in his speech.

The Indian rupee has appreciated by nearly 6% since early September on the back of inflows of over $11 billion through the portfolio route alone. Central banks often manage huge capital inflows by buying dollars and infusing the local currency in order to protect their respective currency from steep appreciation. However, if inflows are too high, the central bank has to mop up the excess local currency by selling bonds or sterlising inflows. This puts upward pressure on interest rates. If inflows are not sterilised, there could be inflationary pressures . A few countries such as Thailand and Brazil have imposed controls on capital flows, but this has only stoked fears about more funds being diverted to Indian markets.

Subbarao said RBI has to manage the impossible trinity, which alludes to the fact that a central bank cannot manage its exchange rate, an open or liberal capital account and an independent monetary policy simultaneously.

An IMF analysis indicates that emerging Asian economies have done relatively well in sterilising the impact of reserves growth on their domestic financial systems, a Fitch Ratings report said. The report warns that there could be an adverse implication of the second round of quantitative easing, or QE2, on China and India.

China and Quantitative Easing

Dollar issuance by the United States is "out of control," leading to an inflation assault on China, the Chinese commerce minister said in comments reported on Tuesday.

Chen Deming, speaking at a trade fair in southern China, said that exporters had done a good job of preparing themselves for exchange rate changes as well as rising labor costs, but were suddenly confronted with new challenges.

"Because the United States' issuance of dollars is out of control and international commodity prices are continuing to rise, China is being attacked by imported inflation. The uncertainties of this are causing firms big problems," Chen was quoted as saying by the official Xinhua news agency.

Chinese officials have criticized U.S. monetary policy as being too loose before, but rarely in such explicit language.

Trade Wars will collapse World Economy - Jim Rogers

2010-10-21T20:45:00.000-07:00

Investment icon Jim Rogers says the trade wars looming on the economic horizon could spell disaster for the global economy.

"The word is on a very dangerous precipice, and if we do continue with trade wars, that's going to be the end of the world economy … we’ve seen many countries putting on capital controls already," Rogers, chairman of Rogers Holdings, told CNBC.

"If we don't solve this problem, it's finished, it’s all over.”

A Chinese story - Behind the scenes

2010-10-18T02:38:00.000-07:00

Benoit Mandelbrot - The non-economist

2010-10-16T21:42:00.000-07:00

Benoit Mandelbrot was the first guy who told that the models of Wall Street, which are based on the assumption of Normal Distribution of returns, are fundamentally wrong and would one day lead of collapse. He is the archetypal Ayn Rand Hero. He has passed away on October 10, 2010. This is a tribute (link from wired)

Carry Trade and India's Dilemma

2010-10-16T01:48:00.000-07:00

Times of India reports:

As Carry Trade (Foreign Direct Investments) enter the markets, they are required to be converted into rupee to invest in India. The huge inflow of dollar makes US currency cheaper in the market, resulting in appreciation of rupee. But, in the process no extra rupee gets infused in the system. To avoid such appreciation of rupee, RBI buys the large forexes . But in this case, the rupee gets infused in system, leading to increase in liquidity. Increased liquidity leads to softening of interest rates, which, in turn, become inflationary.

The RBI may intervene in the foreign exchange market to stem the appreciation of rupee against dollar. But such an intervention will lead to infusion of liquidity in the system, forcing softening of interest rates, which will frustrate central bank's efforts to contain inflation. Annual inflation in September has inched up marginally to the uncomfortably high level of 8.63%.

RBI governor D Subbarao said on Friday said that the central bank will intervene if the inflows are lumpy and volatile. "We are watching the situation and our policy is clear. We will intervene if (FII) inflows are lumpy and volatile or they disrupt macro economic conditions.

Will India too impose controls on FDI like Brazil?

Indian SoftPower

2010-10-15T08:29:00.000-07:00

The anticlimax of the Commonwealth Games 2010 : Indian Sportspeople make India proud. But Indian sport bureaucrats are not even apologetic. Hats off to the Indian Sports team.

Wealth of the Nations

2010-10-09T23:36:00.000-07:00

Despite all the bad economic news coming out of the developed world, the fact remains that they are way ahead of the emerging nations. The chart of the day shows the wealthiest nations in terms of a share in world wealth. As expected, the US and Western European nations lead the pack. However, the rate of growth in wealth is much higher in emerging nations, especially China. Ten years ago, the dragon nation was on the seventh place on the list. Today, it occupies the third spot. By 2015, it is expected to dislodge Japan at the second spot. India's wealth has also grown fast. It has tripled over the last decade and is expected to grow another 80% by 2015. But it still pales in comparison to the dragon nation. China is nearly five times as wealthy as India.

from : equitymaster

Peepli Live : Nuggets from Anusha Rizvi & Mahmood Farooqui

2010-09-27T00:50:00.000-07:00

It was primarily the idea that there are policies for farmers who are dead, but there is nothing for those who are still alive. And that is a repeated sense in the film.

How many of our films show rural India and believe that India has a rural side. People just think about big cities -- Delhi, Mumbai, Bangalore. So have we come to a juncture where there will be one India for the rich and the other of the poor villagers? And we will have visas and passports for the villagers to go into the world of rich Indians?

India - 3rd most powerful country in the world

2010-09-22T21:45:00.000-07:00

India has been named as the third most powerful country in the world. With 8% of global power in its hands, India stands 3rd after United States (22% of power) and China (12% of power). If the European Union is included as a block, then it would account for 16% of global power, making India the fourth most powerful nation in the world. The model used by the agency took into account GDP, defense spending, population and technology for each country to come up with its rankings.

Obamanomics and US – The Great Divide Within

2010-09-22T05:13:00.000-07:00

The reforms of Obama is being heatedly debated in the United States between the two sects of American public. The first sect is Pro-Big-Business guys who feel that Obama hates Business, is driving US to State Capitalism and feel that he is an anti-colonialist like his father Obama Sr.

Taking a strong opposition to Obamanomics, Dinesh D’Souza in his Forbes Article, “Obama’s Problem with Business” articulates his scathing attack on Obama:

A good way to discern what motivates Obama is to ask a simple question: What is his dream? Is it the American dream? Is it Martin Luther King's dream? Or something else? It is certainly not the American dream as conceived by the founders. They believed the nation was a "new order for the ages." A half-century later Alexis de Tocqueville wrote of America as creating "a distinct species of mankind." This is known as American exceptionalism. But when asked at a 2009 press conference whether he believed in this ideal, Obama said no. America, he suggested, is no more unique or exceptional than Britain or Greece or any other country.

Perhaps Obama shares Martin Luther King's dream of a color-blind society. The President has benefited from that dream; he campaigned as a nonracial candidate, and many Americans voted for him because he represents the color-blind ideal. Even so, King's dream is not Obama's: The President never champions the idea of color-blindness or race-neutrality. The race issue simply isn't what drives Obama

What then is Obama's dream? We don't have to speculate because the President tells us himself in his autobiography, Dreams from My Father. According to Obama, his dream is his father's dream. Notice that his title is not Dreams of My Father but rather Dreams from My Father. Obama isn't writing about his father's dreams; he is writing about the dreams he received from his father.

From the anticolonial perspective, American imperialism is on a rampage. For a while, U.S. power was checked by the Soviet Union, but since the end of the Cold War America has been the sole superpower. Moreover, 9/11 provided the occasion for America to invade and occupy two countries, Iraq and Afghanistan, and also to seek political and economic domination in the same way the French and the British empires once did. So in the anticolonial view, America is now the rogue elephant that subjugates and tramples the people of the world.

It may seem incredible to suggest that the anticolonial ideology of Barack Obama Sr. is espoused by his son, the President of the United States. That is what I am saying. From a very young age and through his formative years Obama learned to see America as a force for global domination and destruction. He came to view America's military as an instrument of neocolonial occupation. He adopted his father's position that capitalism and free markets are code words for economic plunder. Obama grew to perceive the rich as an oppressive class, a kind of neocolonial power within America. In his worldview, profits are a measure of how effectively you have ripped off the rest of society, and America's power in the world is a measure of how selfishly it consumes the globe's resources and how ruthlessly it bullies and dominates the rest of the planet.

The other faction which support Obamanomics feel that Obama is trying to save the American Middle Class. For them, Obamanomics also means understanding that America has to now adjust to the new realities of globalization. Simon Tay, in his Forbes article titled “America’s Call to globalization” states that America needs to react proactively to Asia’s Rise and Obama himself represents the new economic realities in the globalized world.

He says ” For a long time, globalization has effectively meant "Americanization." This has meant that others in the world adjust to American mores and culture and that the dispersion of American brands across the world accompanies the spread of commercial interdependence. Americans had little to adjust to in globalization when it was the same as Americanization.

This, however, will change in the globalization that is coming in the wake of the crisis. This deeper globalization is coming back to America in hybrid forms that take in more influences from more sources, especially from a rising Asia. The new globalization is not as such Americanization but is something that could be called "Global-as-Asian." This would be more of a two-way street for people, trade, finance, influence, and ideas.”

Perhaps President Barack Obama can provide not just a political message but a personal example of Global-as-Asian. As a child, Obama followed his mother to live in Indonesia and, from 1967 to 1971, at the formative ages of six to ten, he attended the Besuki Elementary School in Jakarta before returning to Hawaii for school and going on to Columbia University and Harvard Law School.

The Besuki school did not espouse an extremist Muslim religion, as rumors falsely alleged when Obama was campaigning for office. The school had mixed races and religions, including Christians and international students. Given this and his own background, the young boy who is now president could fairly be said not to be a product of a typical American education but instead to have received a kind of international education.

America does need Asia. The rise of Asia can help drive the American recovery and growth if the economies remain linked and American companies can find ways to grow in Asia. But the American need for Asia cannot be politically supported if America comes out of the crisis severely weakened and with a loss of confidence. A weak and shaken America will be likely to see greater anti-Asian, protectionist sentiments, and against allowing more influence and investment to flow from the region into the United States.

On the other hand, if it can show signs of recovery and rebuilding after this crisis, then America can respond proactively to the rise of Asia and the new and deeper processes of globalization--Global-as-Asian.

Carry Trades - The Secret of Indian Stock Market's FDI

2010-09-22T04:22:00.000-07:00

Interest Rates and Economic Stimulus

2010-09-22T03:44:00.000-07:00

How did the US Banks so much during the financial crisis?

2010-09-22T03:36:00.000-07:00

America Without a Middle Class - I

2010-09-18T04:46:00.000-07:00

Elizabeth Warren : On the disappearing American Middle-Class

Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?

Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.

The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s. But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago -- for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance.

To cope, millions of families put a second parent into the workforce. But higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder. Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases -- but it hasn't been enough to save them. Today's families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer.

America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

America without a strong middle class? Unthinkable, but the once-solid foundation is shaking.

Asatyameva Jayete.

2010-09-17T22:38:00.000-07:00

I came across the following Social Media Mail - MOHAN MARUTI--INDIA

A few days ago I was in a panel discussion on mergers and acquisitions in Frankfurt, Germany, organised by Euroforum and The Handelsblatt, one of the most prestigious newspapers in German-speaking Europe.

The other panellists were senior officials of two of the largest carmakers and two top insurance companies — all German multinationals operating in India.
The panel discussion was moderated by a professor from the esteemed European Business School. The hall had an audience that exceeded a hundred well-known European CEOs. I was the only Indian.

After the panel discussion, the floor was open for questions.That was when my “moment of truth” turned into an hour of shame, embarrassment — when the participants fired questions and made remarks on their experiences with the evil of corruption in India.

The awkwardness and humiliation I went through reminded of The Moment of Truth, the popular Anglo-American game. The more questions I answered truthfully, the more the questions got tougher. Tougher, here means more embarrassing.

European disquiet

Questions ranged from “Is your nation in a coma?”, the corruption in adminstration, even in judiciary, the possible impeachment of a judge, the 2G,teecom scam and to the moneyin billions, parked illegally in tax havens.
It is a fact that the problem of corruption in India has assumed enormous and embarrassing proportions in recent years, although it has been with us for decades. The questions and the debate that followed in the panel discussion was indicative of the European disquiet. At the end of the Q&A session, I surmised Europeans perceive India to be at one of those junctures where tripping over the precipice cannot be ruled out.
Let me substantiate this further with what the European media has to say in recent days.
In a popular prime-time television discussion in Germany, the panellist, a member of the German Parliament quoting a blog said: “If all the scams of the last five years are added up, they are likely to rival and exceed the British colonial loot of India of about a trillion dollars.”

Banana Republic

One German business daily which wrote an editorial on India said: “India is becoming a Banana Republic instead of being an economic superpower. To get the cut motion designated out, assurances are made to political allays. Special treatment is promised at the expense of the people. So, Ms Mayawati who is Chief Minister of the most densely inhabited state, is calmed when an intelligence agency probe is scrapped. The multi-million dollars fodder scam by another former chief minister wielding enormous power is put in cold storage. Prime Minister Manmohan Singh chairs over this kind of unparalleled loot.”
An article in a French newspaper titled “Playing the Game, Indian Style” wrote: “Investigations into the shadowy financial deals of the Indian cricket league have revealed a web of transactions across tax havens like Switzerland, the Virgin Islands, Mauritius and Cyprus.” In the same article, the name of one Hassan Ali of Pune is mentioned as operating with his wife a one-billion-dollar illegal Swiss account with “sanction of the Indian regime”.
A third story narrated in the damaging article is that of the former chief minister of Jharkhand, Madhu Koda, who was reported to have funds in various tax havens that were partly used to buy mines in Liberia. “Unfortunately, the Indian public do not know the status of that enquiry,” the article concluded.
“In the nastiest business scam in Indian records (Satyam) the government adroitly covered up the political aspects of the swindle — predominantly involving real estate,” wrote an Austrian newspaper. “If the Indian Prime Minister knows nothing about these scandals, he is ignorant of ground realities and does not deserve to be Prime Minister. If he does, is he a collaborator in crime?”
The Telegraph of the UK reported the 2G scam saying: “Naturally, India's elephantine legal system will ensure culpability, is delayed.”

Blinded by wealth

This seems true. In the European mind, caricature of a typical Indian encompasses qualities of falsification, telling lies, being fraudulent, dishonest, corrupt, arrogant, boastful, speaking loudly and bothering others in public places or, while travelling, swindling when the slightest of opportunity arises and spreading rumours about others. The list is truly incessant.
My(MOHAN'S) father, who is 81 years old, is utterly frustrated, shocked and disgruntled with whatever is happening and said in a recent discussion that our country's motto should truly be CHANGED TO

Asatyameva Jayete.

Europeans believe that Indian leaders in politics and business are so blissfully blinded by the new, sometimes ill-gotten, wealth and deceit that they are living in defiance, insolence and denial to comprehend that the day will come, sooner than later, when the have-nots would hit the streets.

In a way, it seems to have already started with the monstrous and grotesque acts of the Maoists. And, when that rot occurs, not one political turncoat will escape being lynched.

The drumbeats for these rebellions are going to get louder and louder as our leaders refuse to listen to the voices of the people. Eventually, it will lead to a revolution that will spill to streets across the whole of India, I fear.

Perhaps we are the architects of our own misfortune. It is our sab chalta hai (everything goes) attitude that has allowed people to mislead us with impunity.

No wonder Aesop said. “We hang the petty thieves and appoint the great ones to high office.”
(The author is former Europe Director, CII, and lives in Cologne, Germany. )

Transportation Innovation : Now in India

2010-09-14T20:33:00.000-07:00

Last Month, I came across the MegaBus, Chinese Transportation Innovation. Now India seems to be not that far behind. Transportation Pods are being planned in Gurgaon, Delhi.

Haryana chief minister Bhupinder Singh Hooda has a high-tech solution that will address commuters' problems in one shot: Pod taxis. And he is serious about it.

As Gurgaon residents well know, the city roads are an optical illusion. The unbroken chain of craters and ditches that pass for roads have for long burned holes in the pockets and hearts of the residents.

But, if Hooda has his way, you could bypass the troublesome roads altogether. " Pod taxis seem to be the best way to take public transport through all the built up areas," Hooda told TOI in an exclusive interview. Clearly, the chief minister aims high.

The CM believes that these battery-operated, driverless vehicles that run on an elevated track, will begin to ply in the next few years and connect people point to point - what the government claims as "providing last mile connectivity".

Read more: Forget potholes, ride pod taxis in Gurgaon: Hooda - The Times of India http://timesofindia.indiatimes.com/city/gurgoan/Forget-potholes-ride-pod-taxis-in-Gurgaon-Hooda/articleshow/6550018.cms#ixzz0zZ9DIQxI

One in three Indians 'utterly corrupt': watchdog head

2010-09-08T04:53:00.000-07:00

Almost one-third of Indians are "utterly corrupt" and half are "borderline", the outgoing head of the country's corruption watchdog has said, blaming increased wealth for much of the problem.

Pratyush Sinha, who retired as India's Central Vigilance Commissioner this week, said the worst part of his "thankless job" was observing how corruption had increased as people became more materialistic.

"When we were growing up I remember if somebody was corrupt, they were generally looked down upon," he said. "There was at least some social stigma attached to it. That is gone. So there is greater social acceptance."

Transparency International, the global anti-graft body, puts India 84th on its corruption perception index with a 3.4-point rating, out of a best possible score of 10.

New Zealand ranks first with 9.4 points and Somalia last on 1.1 points.

The campaign group has said that each year millions of poor Indian families have to bribe officials for access to basic public services.

Sinha told the Mint newspaper in an interview published on Tuesday that 20 percent of Indians were "honest, regardless of the temptations, because this is how they are. They have a conscience.

"There would be around 30 percent who would be utterly corrupt. But the rest are the people who are on the borderline," he said, adding that corruption was "palpable".

Sinha said that in modern India "if somebody has a lot of money, he is respectable. Nobody questions by what means he has got the money."

China has the world's biggest traffic jam

2010-08-24T04:01:00.000-07:00

Whatever traffic hell you endured getting to work this morning is nothing compared to what’s happening in Beijing, where a mammoth traffic jam is entering its ninth day with no relief in sight.

Thousands of trucks have jammed National Expressway 110 since Aug. 14, creating a traffic jam stretching 100 kilometers. Authorities attribute the mess to highway construction exacerbated by accidents and breakdowns

Niyamgiri is saved for now?

2010-08-24T03:55:00.000-07:00

Niyamgiri Hills, Orissa: The Vedanta mining project in Orissa has been struck down by the government. This after a committee said the company had violated forest and environment laws.

Forest clearance for the project in the Niyamgiri Hills has been cancelled and there shall be penal action against Vedanta for violating laws. A notice has also been issued to the company for its alumina refinery in Lanjigarh, for increasing "1 mn tonne capacity...to 6 mn tonnes illegally."

Environment Minister Jairam Ramesh said, "There has been a very serious violation of Environment Protection Act, Forest Conservation Act and the Forest Rights Act...there have been no emotions and no politics and no prejudice involved in this report

Click here for full report.
Read more at: http://www.ndtv.com/article/india/jairam-says-no-to-vedanta-mining-project-in-orissa-46736?cp

we are like this only

2010-08-23T09:15:00.000-07:00

China - World's Second Largest Economy now

2010-08-22T23:53:00.000-07:00

After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States.

Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter of 2010, slightly below China’s $1.33 trillion.

By the way, where is India?

Are American Small Investors shying away from Stock market?

2010-08-22T23:35:00.000-07:00

Small Investors have played a large part in the American Stock Exchange unlike in the Indian Stock markets. Last week I read a article that few Small Indian Investors are also getting out of the markets by withdrawing from the Mutual Funds.

NYTimes is reporting that the phenomena is happening in America too, as more than 20 billion USD have been withdrawn from their Mutual Funds. It could be a long term drift in investment psychology and the attitudes Americans have about their money.. Are slowly large shifts happening?

Indian Gymnastics - from Wired.com

2010-08-21T04:13:00.000-07:00

Infosys - A Chop Shop?

2010-08-09T05:21:00.000-07:00

Infosys - A Chop Shop - Senator Schumer

Criticising companies outsourcing highly-paid American jobs, a US Senator has described Indian IT major Infosys as a "chop shop", a place where stolen cars are dismantled and parts sold separately.

The comments were made by Democrat Senator of New York Charles E Schumer during discussions on the Border Security Bill, a USD 600-million emergency package aimed at strengthening security along the porous Mexican border.

"The emergency border funds will be paid for by assessing fees on foreign companies known as chop shops that outsource good, high-paying American technology jobs to lower wage, temporary immigrant workers from other countries.

"These are companies such as Infosys," Schumer said on the Senate floor on Thursday.

My Comments:

Infosys and other Indian Software Company should try to do at least one or two products, to prove that they also have real capability in developing software. I am always surprised to see them keep on multiplying their revenues Year-over-year even when the Global Economy itself
is under performing, even without holding any IP and real competitive edge.

My thoughts is that they are leveraging the gap between the cost of essential life services in India vs the same in US (indirectly through the currency value difference between Indian Rupee and the US Dollar). But this Currency Value difference itself is the ugly offspring of US making its Paper currency the world's Currency (giving a monopoly player status for US). The US is now tasting its own medicine it had been administrating to the entire world.

What is happening is that non-tech, non-financial service providers (read as middle class people) value has eroded under globalization across the globe. This exploitation cannot go on forever and US non-tech, non-finance service providers are now fighting back. Their Indian Counterparts to would start fighting back soon.

Urbanization & Growth : India, China & Asia

2010-08-04T00:35:00.000-07:00

Notes from Reuters Special on Urbanization - India & China Story

1. It happens every year. When monsoon rains lash Mumbai, the city turns into a cesspool, which along with its potholed roads and gridlocked traffic, mocks its ambition of becoming a global financial center. India has Asia's third-largest economy and the increasing global clout that goes with it. It is already home to a quarter of the world's 20 most densely populated cities.

2. Indian cities over the next two decades will also house 40 percent of the country's population and generate some 70 percent of new job opportunities, McKinsey Global Institute (MGI), the research arm of consultancy McKinsey, estimates in a report.

"Across all major quality-of-life indicators, India's cities fall well short of delivering even a basic standard of living for their residents," the report said. To cater to this growth, India needs to invest $1.2 trillion in capital expenditure, mainly infrastructure, over that period, an eight-fold increase of current spending levels, MGI said.

3. India will, over the next two decades, see an urban transformation the scale and speed of which has not happened anywhere except China, with many cities becoming larger than many countries, in terms of population size and GDP.

"It's going to be one of the most defining changes that we have yet to see," said Roopa Purushothaman at Everstone Investment Advisors.

Analysis :

Historically, India's politicians and policy-makers have focused on villages. Urbanization has largely been a result of existing cities expanding economically and demographically, rather than anything planned. This is reflected in Sonia Gandhi's approach, who has conceded that the price hike in petrol is to fund the social schemes (read village oriented). This would tantamount to penalize the urban population to help rural population.

Economic plan ensured jobs not heading to India, China: Obama

2010-08-02T23:55:00.000-07:00

United States President Barack Obama has said that the new economic plan of his government focused on making the middle class more secure and the country more competitive so that the jobs and industries of the future were not outsourced to China and India.

From: Hindu

A Chinese Innovation - Metro -meets BUS meets TRAM

2010-08-02T23:29:00.000-07:00

Finally Chinese have come of age and are now providing innovative solutions to world's problems.

Here is a Metro Meets BUS meets TRAM idea that might be implemented in Beijing Suburb this year. The concept is interesting where Countries like India can leverage on its new road infrastructure to create better Mass Transport Systems.

Deficit Rise foretalls World War III?

2010-08-02T05:54:00.000-07:00

Above chart is US federal deficit / GDP ratio, 1900-2010. The two prior peaks (1919=17, 1943=28) coincided with WWI and WWII respectively. Currently we are at the 10.64; 3rd highest in the 110 year series, and not declining yet.

Does this forecast a world war III?

NRI remittances leading to boom in wealth in villages

2010-07-24T22:09:00.000-07:00

source :
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/NRI-remittances-leading-to-boom-in-wealth-in-villages/articleshow/6212272.cms

When Shreyas Vani, a resident of Karamsad in Gujarat’s Anand district, wants to loosen his tired muscles after a hard day’s work, he just ambles into a swanky parlour bang in the middle of the village.

“It is just one of many (luxuries of life). Young people in our village yearn for them and want them right here. Money is not a factor,” he says, as the latest model of iPod deliberately slips out of his jeans’ pocket.

Two thousand kilometers away in Punjab’s Jallandhar district, when potato seed farmer, Santokh Singh, wanted to buy a car, he hitched a cab ride to Chandigarh, only to drive back in a brand new Audi A4. He says his fellow farmers are not settling for anything less, so why should he. “Our village has narrow roads, but a broad vision for BMWs, Mercs and Audis,” Singh laughs.

Stories such as these redefine rural life as we perceive it. Some villages in India are ahead of the curve and when it comes to luxury, they offer an opportunity to brands, no less secondary to businesses in the metros. Here people want the best cars and branded diamond jewellery. They shop for foreign tours-for travelling as well as study, and use Wi-fi enabled laptops. Here, the raw scent of the farmlands get mixed with the fragrance of a Channel and Diesel.

The secret is quite an open one, whether the village be in Punjab, Gujarat or Kerala. Remittances from their NRI sons and daughters have led to an unprecedented boom in wealth. In Kerala, near Thiruvalla, lies the Kumbanad-Kozhencheri belt which has a whopping `5,400 crore parked in bank deposits! In Karamsad village, remittances have topped `1,500 crore in banks and post offices.

Take the example of Kerala. Real estate development, the most visible sign of recent prosperity that provided jobs to 25 lakh people in the state is also roaring in Kochi after being hit by the Gulf crisis earlier this year.

Hoardings at city junctions announce the arrival of new luxury apartments, the kinds which are usually found in posh localities of metro cities. Big builders already have more plans.

“A lot of investment had been planned there on the basis of projected demand linked to the expansion of the technology parks, and in homes,” says SN Raghuchandran Nair, president of the Confederation of Real Estate Developers. What has this done to villages? Well they look more like a wealthy suburb in a western country than an Indian village.

If this sounds unbelievable, wait till you hear about Asia’s richest village. With remittances of over `5,000 crore, people in Madhapar in Gujarat’s Kutch district, live life kingsize. Apart from cars like the Jaguar, or BMW 7-series, they are particularly enthused by the brand of cosmetics they use. Jadhavbhai Varsani, who runs a plush supermarket in the town, says that imported cosmetics, from L’Oreal to Dunhill and Diesel, sell like hot cakes.

Young people buy only top end brands as they are used to it from the trips abroad,” he says. As you enter his huge store, you can see cosmetics from Dove to Armani neatly arranged in long shelves. The supermarket itself looks straight out of a California suburb.

For many jewellery retailers, traditional hoardings and billboards are passe’ in Karamsad. “Today, we hire local models and organise events at marriage parties and business meetings to attract a large number of cash-rich youngsters for our latest jewellery design,” says Rupen Patel, a jeweler.

In Punjab, long among the more prosperous villages in the country, the image of turbaned kurta worn farmer driving a white Maruti car laden with his produce is like a yellowing photograph.

Now, there is big competition amongst companies with farmers opting for Mercs, BMW, Audi and other high-end SUVs, say car dealers in the region. Little wonder then that when Mercedes opened its first showroom in Jalandhar, it immediately saw customers who were from the farming community.

Years ago, these farmers used to buy tractors in groups extracting heavy discounts from the tractor makers or dealers. Now, they are doing the same with car dealers. Says Raghubir Singh, a member of the Jalandhar Potato Growers Association, “We have approached a big car maker, and they have told us we will get a good offer if we all book through the same dealer.”

The difference between the rich rural buyer and the consumers in the big cities is that while the rural rich are willing to pay upfront, the urban rich would take a loan and pay up in instalments.

“There is a tax issue as well, which the farmer doesn’t have to comply with. But more importanly, he has a higher disposable income and hence easy to do business with,” says a diamond jewellery company executive.

Even if living in untold riches, trust young adults in Gujarat to take to stock trading as a duck takes to water. In Ena village in South-Gujarat, which looks more like a glitzy township, most young people are dedicated investors in not just stocks but also complex financial instruments, including derivatives.

Many of them are regular visitors to the US, the UK and Australia, where their relatives have done well for themselves. If anywhere in India airline companies, tour operators and foreign study agents could do roaring business, it is here.

India is the biggest victim of financial crisis-induced poverty

2010-02-10T07:55:00.000-08:00

India is the biggest victim of financial crisis-inducedpoverty, according to data obtained by TOI from the United Nations Department of Economic and Social Affairs' (UNDESA). Check out these figures.

The UNDESA data estimates that the number of India's poor was 33.6 million higher in 2009 than would have been the case if the growth rates of the years from 2004 to 2007 had been maintained. In 2009 alone, an estimated 13.6 million more people in India became poor or remained in poverty than would have been the case at 2008 growth rates.

In other words, while a dip from the 8.8% growth in GDP averaged from 2004-05 to 2006-07 to the 6.7% estimated for 2008-09 may be nothing like the recession faced by the West, its human consequences for India were probably worse. The 2.1% decline in India's GDP growth rate has effectively translated into a 2.8% increase in the incidence of poverty.

Link

India puts on hold first GM food crop : Just for Now

2010-02-09T06:36:00.000-08:00

BBC reports : India has deferred the commercial cultivation of what would have been its first genetically modified (GM) vegetable crop due to safety concerns.

Environment Minister Jairam Ramesh said more studies were needed to ensure genetically modified aubergines were safe for consumers and the environment.

The GM vegetable has undergone field trials since 2008 and received approval from government scientists in 2009.

My Take : Wait for the next food crisis.. GM Foods would be making a backdoor entry using Disaster Capitalist Strategy

Church of England withdraws from Vedanta

2010-02-05T19:32:00.000-08:00

BBC : The Church of England has said that it will withdraw investment from a firm involved in a controversial mining project in the Indian state of Orissa.

This validates the stand of the environmentalists stand on Orissa. But POSCO is said to have started their operations there already. What would happen to Niyamgiri now?

Courts apathetic to sacking under cover of globalisation: Supreme Court

2010-01-30T20:47:00.000-08:00

The Brand value of Globalization is under a Recession now. The Indian Judiciary is now siding with the Labour these days.

The Supreme Court has expressed anguish at courts’ apathy to the plight of workers being retrenched in the guise of globalisation and economic liberalisation.

A Bench of Justices G.S. Singhvi and A.K. Ganguly, in different but concurring judgments, regretted that there was a visible shift in the courts’ approach to cases involving interpretation of social welfare legislation.

Justice Singhvi said: “The attractive mantras of globalisation and liberalisation are fast becoming the raison d’etre of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic to the plight of industrial and unorganised workers.”

He said: “In a large number of cases like the present one, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched by creating bylanes and sidelanes in the jurisprudence developed by this court in three decades. The stock plea raised by the public employer in such cases is that the initial employment/engagement of the workman-employee was contrary to some or the other statute or that reinstatement will put an unbearable burden on the financial health of the establishment.”

Harjinder Singh, appointed in the Punjab State Warehousing Corporation in March 1986, was dismissed in July 1988. Acting on a writ petition, the Punjab and Haryana High Court stayed the order and he continued in service. Finally in September 1992, the petition was dismissed as withdrawn.

In November 1992, another order was passed sacking 22 workers including the appellant. While the labour court directed their reinstatement with 50 per cent back wages, a single judge of the High Court, entertaining an appeal, ordered compensation of Rs. 87,582. The present appeal is directed against this judgment.

Justice Singhvi pointed out that “Courts have readily accepted such plea unmindful of the accountability of the wrongdoer and indirectly punished the tiny beneficiary of the wrong, ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood. It needs no emphasis that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of social and economic justice, equality of status of opportunity, the freedoms enshrined in the Constitution remain illusory.”

Statutory goal

In a separate judgment, Justice Ganguly said: “I am in clear agreement with Justice Singhvi that this court has a duty to interpret statutes with social welfare benefits in such a way as to further the statutory goal and not to frustrate it.”

He said: “In doing so, this court should make an effort to protect the rights of the weaker sections in view of the clear constitutional mandate. Social Justice, the very signature tune of our Constitution and being deeply embedded in our constitutional ethos, in a way is the arch of the Constitution which ensures rights of the common man to be interpreted in a meaningful way so that life can be lived with human dignity.”

He said: “I share the anxiety of Justice Singhvi about a disturbing contrary trend which is discernible in recent times and which is sought to be justified in the name of globalisation and liberalisation of economy. Any attempt to dilute the constitutional imperatives in order to promote the so-called trends of globalisation may result in precarious consequences. Reports of suicidal deaths of farmers in their thousands from all over the country, along with escalation of terrorism, throw a dangerous signal.”

Bullets trains for US

2010-01-29T20:43:00.000-08:00

The Automobile Lobby is said to be behind the absence of state-of-the art trains in the US. With Oil Price Peaking, things seems to change. Could mass-adoption of Trains the next thing world over?

Wired:Believe it: Bullet trains are coming.

After decades of false starts, planners are finally beginning to make headway on what could become the largest, most complicated infrastructure project ever attempted in the US. The Obama administration got on board with an $8 billion infusion, and more cash is likely en route from Congress. It’s enough for Florida and Texas to dust off some previously abandoned plans and for urban clusters in the Northeast and Midwest to pursue some long-overdue upgrades. The nation’s test bed will almost certainly be California, which already has voter-approved funding and planning under way. But getting up to speed requires more than just seed money. For trains to beat planes and automobiles, the hardware needs to really fly. Officials are pushing to deploy state-of-the-art rail rockets. Next stop: the future.

Basu pushed land reforms but left Bengal as industrial wasteland

2010-01-17T20:47:00.000-08:00

Economic Times about Jyoti Basu, who strode the nation’s political landscape like a colossus, passed away this afternoon at a Kolkata hospital. Basu, who missed being the prime minister in 1996 because of the CPM’s ideological rigidity, was in charge of West Bengal for a record 23 years and, in the process, became the longest-serving chief minister of any state.

Basu, who put the emphasis on the bread and butter goals of communism, leaves behind a mixed legacy — while he was credited with decentralisation of power and land reforms, the state became an industrial wasteland during his tenure. Along with his senior colleagues EMS Namboodiripad and H S Surjeet, he scripted his party’s political pragmatism in 1989 and later in 1996 by aiding the formation of two non-Congress coalitions at the Centre. Despite hailing from a party seeped in dogmatism, he was credited with running a coalition through consensus politics.

Basu, who became the unanimous choice of the United Front to lead the government at the Centre in 1996, was denied the opportunity by his own party’s central committee which rejected the proposal by three votes. Incidentally, it were Prakash Karat, Sitaram Yechury and S Ramachandran Pillai, who had mobilised support against the proposal in the central committee meeting. Basu, known for whiplash candour, told the media in December 1997 that the decision of the party was a “historic blunder”.

Aamir, 3 Idiots and Pursuit of Excellence

2010-01-13T23:25:00.000-08:00

Film-making is very similar to entrepreneurship. The role of a film producer is analogous to that of a venture capitalist. Good producers, like smart venture capitalists, know that it's not just about writing a check and it's not just about big stars and quality music. In the same way, simply providing venture funding or throwing money at a start-up cannot ensure success, and it's not necessarily a great thing for entrepreneurs to have lots of work experience and domain expertise in their industry. The actors and the director, like entrepreneurs, work to bring the script and business plan to life. More than anything else, making a good film and building a business from scratch both require oodles of creativity.

Mr. Khan's recent cinema has sensitized millions of parents to let their children become what they want to, rather than forcing them to be doctors, lawyers or engineers. The subtext of why parents would wish so for their children is, however, missing from the narrative.

In a socialist India with strict government control over economic activity, those vocations were likely the only ones which came with a certain guarantee to a minimum standard of living. Since the liberalization of 1991 and the boost to economic freedom given by the BJP-NDA government from 1998-2004, career opportunities have expanded dramatically. Today, young Indians can be productively employed as radio jockeys, artists or sportspeople. Popular attitudes haven't caught up with the growth of opportunity and the majority of Indians continue to believe that what you study in college should dictate what you do in life. It is incomprehensible to the pre-1980s generation why someone might choose to study literature, or why an engineer might want to be a photographer. This stems from the perceived or real lack of economic opportunity in "unconventional" career choices, and the solution is economic liberalization.

Creating an environment that allows people to pursue excellence in a field of their choosing is what makes for a prosperous and happy society. The importance of effective policy design and implementation cannot be over-stated to achieve that end. In that context, last year's Right to Education bill was a major letdown. It does not allow individuals and communities to run schools as they would deem fit, favoring needless government control instead. It focuses on rationing existing supply instead of sowing the seed for capacity expansion.

My Take : Pursuing Excellence has been sure way of disaster for "Leaders" in my generation of Indians. Nothing has changed with Globalization in India means migrating to US, Europe or Singapore. Pursuing Excellence for the current teenage upper middle class Indians is a distant possibility (but more practicality) with private colleges commoditizating Engineering degrees.

Clusters. not cities, the strength of India

2010-01-07T19:02:00.001-08:00

S Gurumurthy was ridiculed when he spoke about swadeshi in 1991. Ten years down the line many now accept that it is necessary to have someone with this viewpoint in a globalised India. In rediff, Gurumurthy talks about globalization :

Who is talking about globalisation today? Today, it’s just not environmentally, ecologically and culturally sustainable. I have always maintained that it was not economically sustainable, because it is contrary to the very meaning and definition of economics which is associated with frugality.

It is an executive class economics different from the economy class which brings out the difference between economics and excessiveness.

Moreover, globalisation disregards the existence of countries; they talk about a global society, global rule, global citizens, global villages, etc. It was an absolutely idealistic idiosyncrasy. That is gone.

Who is talking about the WTO? I told you long ago that the WTO will not last. If you create an artificial structure, it will not stand. People in different parts of the world have their own models of living; you cannot homogenise them, make them wear the same dress, eat the same food, or see the same cinema or have the same goals. This is what West-centric globalisation attempted, and got the first taste of it in the last four, five years.

S. Gurumurthy, the convener of the Swadeshi Jagran Manch also speaks about the Indian economy and the success stories that small industrial centers like Tirupur, Namakkal and Sivakasi have turned into.

You have been talking about the entrepreneurial successes of small places like Tirupur, Namakkal and Sivakasi. But what about the closure of several textile units in Tirupur? Or the adverse effect of the cut in excise duty on factory-built truck bodies on units in Namakkal?

As far as Namakkal is concerned, the body building units and large truck manufacturers need to work together. This is not what is happening.

In fact, if these small operators get some kind of affiliation or franchise rights, it will ensure better quality work and a more organized way of working. They will also get assured work.

We, thus, need to work out a Japanese model of outsourced work. For example, Ashok Leyland [ Get Quote ] can outsource its body building work from units in Namakkal.

How do you react to the lowering of excise duties on truck bodies?

There is some sense in this tax. Earlier, you paid tax only when the company built the body, not otherwise. This is a kind of evasion. So, by plugging this, the government has made escaping excise duty net difficult.

Are you happy with the way the government is taking care of the centres of excellence?

My complaint against the government has been that it is not aware of what is happening. Many people in the finance ministry do not know what people in Tirupur are doing.

The Swadeshi Jagran Manch, therefore, suggested that the government must announce an industrial cluster policy, which it has now done. They (the government) have chosen Tirupur as the knitwear industrial cluster, Coimbatore as the casting and pump set-making industrial cluster. Similarly, some 42 such clusters have been chosen in India. This is only because of the campaign started by the Swadeshi Jagran Manch.

We also fought for Sivakasi. If not for us, Sivakasi would have been destroyed completely. Who was destroying Sivakasi? Not the government, but non-governmental organizations. And the media.

And for each of these clusters, they have named a monitoring agency. For example, they have named the Tirupur Exporters Association as the monitoring agency in Tirupur because it is predominantly an export centre.

The government is allocating Rs 50 crore (Rs 500 million) for the development of these centres.

So, I would say, we are seeing a more focused policy from the government.

You said the finance ministry was not aware of what was happening in Tirupur when it was bringing in large amounts of money through exports...

Why do you blame the government alone? Was the media aware? What has the media done to Karur, Tirupur, Namakkal and Sivakasi?

Media and some NGOs have only tried to destroy these places by focusing on child labour. The media in this country can only ask questions.

The belief that the government must know everything is a socialist one. The market too must know everything; and local administration, businessmen, professionals and media are part of the market forces.

What do you attribute the success of such small places to?

Hard work.

The more deprived a place is, the more hard working its people are. Thanjavur district did not develop industrially because it is not a deprived place. Wherever you find water shortage, wherever there is no irrigated land, you find the people of that area very hard working. They take to industry, businesses and manufacturing.

Is deprivation the only reason for their hard work and success in their endeavours?

People of India have the capacity to do things. Each community has done something admirable. These are community-driven models.

I would say, IITs and IIMs (Indian Institutes of Technology and Indian Institutes of Management) are not the ones that generate centres of enterprise in India; it is the communities.

People who set up businesses are very ordinary people. Of 300 families which export knitwear from Tirupur, 90 per cent do not even know English.

For example, in Tirupur, people had some skills, which they needed to exploit. First, they were cotton cultivators. From cotton cultivating, they went to ginning, from ginning to spinning, from spinning to weaving, and from weaving to knitting. This is how the entire area moved ahead. They developed skills in stages.

What kind of help are these communities getting?

I don't think they are getting any help. They succeeded through their own hard work.

In fact, I don't want the government or media or NGOs to disturb them at all. The greatest disturbance comes from the NGOs and the media, and then from government officials.

Why did the Swadeshi Jagran Manch ask the government to have an industrial cluster policy? Will it not disturb them?

The government has recognised that the clusters do good work. Cluster policy recognises that there is an atmosphere for development and growth in clusters.

They wanted to create an artificial industrial centre near Madurai [ Images ] as a knitwear centre. There are only sheds available now! Nobody has made any knitwear there. Why? Because you cannot artificially construct business.

Businesses have to evolve with the skill and hard work of the people. So, repeating Tirupur near Madurai failed.

This is not the work of the market; this is the work of the community. Which place has the highest per capita income in India? Not Mumbai [ Images ], Delhi [ Images ], Chennai or Bangalore. It is Morvi in Gujarat, where they make Ajanta wall clocks!

Can anyone help evolve such skills in an area? If so, how?

I think it is only social capital which can do it. In my view, the community is the social capital in India. Take Tamil Nadu, for instance. The Naidus, the Kongu Goundars, the Nadars, and the Rajus took to commerce there. These communities developed financially, educationally and socially.

The Thevar community and Vanniyar community took to politics. They became government dependent in their mindset. If you become dependent on the government, your development will stagnate.

Community structure is, thus, the social capital through which the country can develop. It is being wasted in politics.

I also would say that the media has failed to highlight community success stories. The intellectuals and media have a responsibility in helping communities evolve. But they have failed in their duties.

What does the Swadeshi Jagran Manch plan to do in future?

We are not planning to do anything. We are studying; we are trying to understand the social and political situation in India.

This is our open air university. Once we empirically study and understand, we will begin forming opinions. We have no money or expertise. We only create awareness. We are generating the desire for self effort through awareness campaigns.

I feel traditional skills are suffering from lack of recognition by the establishment; be it the government, or the judicial system, or the media. They can't understand that Indians can function only in small collectivities, they cannot function as atomized individuals.

For example, in the West, there is social security which is an atomized plan. In India, it is the families that take care of social security.

But what policy do we have for the family? You are treating the Indian individual like a Western one and taxing him. Here, he is taking care of five to eight people. But policy makers, economists and media are completely ignorant of this fact. You need a very different approach to India.

Against the backdrop of globalisation, how difficult is it to talk to people about swadeshi?

India is one sixth of humanity. Opinion formation takes a long time here; particularly when you have Westernised people to run the country and make opinions.

Why did you think of swadeshi?

Globalisation and liberalization were the reasons. With socialism, we were committing one type of mistake. With globalisation, we were committing another.

The government's socialist policies have already stifled this country's enterprise. This also created very poor work culture.

The Western belief -- that the government will do nothing and the market will do everything -- is also wrong. In India, the delivery mechanism is not just the market; it is the family, it is the community, it is the state and the market.

The market is only one of the institutions of delivery and it is not the sole institution. This was the base of the Swadeshi Jagran Manch. And, now we are proving to be right.

Are you happy with what the finance minister has offered in his Budget?

See, there is nothing in the Budget for agriculture, especially when agricultural production has dropped by 15 to 16 per cent. This is a serious omission.

The Budget is made according to the opinion of the middle, upper-middle and educated classes. Budgets mainly look to satisfying them.

What kind of impact will the neglect of agriculture have on Indian economy?

If the bottom of the pyramid is not taken care of, it is going to have a long-term impact on the economy.

Besides ignoring agriculture, the Budget also doesn't talk about an agenda for the textile industry which is going to face international competition in 2005. It is also an omission.

What about competition from China?

India has inherent strengths. Unfortunately, it has not been properly augmented. You must know the basic strength of India doesn't lie in Mumbai, Delhi or Kolkata [ Images ].

India's strength is its industrial clusters.

India is already a global player. Doesn't China have poverty? But they are not talking about poverty. Here, you are talking all the time about India's poverty. Indians must understand India first. They must begin talking well of India.

It doesn't matter to me at all to hear that India's share of global trade is 0.75 per cent. Global trade is not the index of a country's development. So long as India can generate domestic demand, India can be a big player.

In fact, one sixth of humanity cannot depend on global trade. It has to be largely dependent on domestic trade. So we are applying norms applicable to small countries like Japan [ Images ], Korea, and Taiwan, to India. That is because you don't have originality. You set wrong benchmarks and suffer in comparison.

My Take: Unfortunately, the Industrial Clusters address the needs of lower-middle/lower class people only. The low wages and long work hours of Industrial Clusters cannot support and sustain middle class. The Government is underplaying the clusters segment completely due to this reason. How can we build a knowledge economy on the basis of these clusters.. like integrate the fashion industry with the knitwear industry and create a affordable fashion, a huge market across the globe would form the right answer.

Case for more states : New miracle economies: Bihar, poor states

2010-01-03T08:16:00.000-08:00

SA Iyer of Swaminomics says:

ndia achieved record annual GDP growth, averaging 8.45%, in the five years, 2004-05 to 2008-09. But was this inclusive, and did it benefit the poor masses?

We have no data on poverty beyond 2004-05. But the CSO has current data on the economic growth of the states. Historically, the chronically poor states were Orissa plus the BIMARU quartet (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh), of which three have been sub-divided. Have these eight poor states participated in India’s boom?

Yes, absolutely. Indeed, five of India’s eight ultra-poor states have become miracle economies, defined internationally as those with over 7% growth. The best news comes from Bihar, historically the biggest failure. From 2004-05 to2008-09, Bihar averaged 11.03% growth annually. It was virtually India’s fastest growing state, on par with Gujarat (11.05%). That represents a sensational turnaround. Nitish Kumar deserves an award for the most inclusive revolution of the decade.

Other poor states have done very well too. Uttrakhand (9.31%), Orissa (8.74%), Jharkhand (8.45%) and Chhattisgarh (7.35%), have all grown faster than the standard miracle benchmark of 7%.

India today has 28 states. Assuming 20% population growth since the last census, Uttar Pradesh has 198 million people, more than Brazil, Russia or Pakistan. Maharashtra has 106 million, West Bengal 96 million and Andhra Pradesh 90 million. All are much bigger than France or Britain. At the other end of the scale, Sikkim has just 0.6 million people, Mizoram 1.1 million and Arunachal Pradesh 1.3 million. Clearly, statehood has been determined by political expediency, not logic.

Is there an economic case for carving smaller states out of large ones? Some analysts say small states won’t be economically viable. Others believe small states will fare better, since ordinary people will have better access to power elites. Consider the record of three states carved out of larger ones in 2000 - Jharkhand, Chhattisgarh and Uttarakhand. Ignore data for the first few transitional years. Instead, focus on the average growth rate of gross state domestic product for the last five years, from 2004-05 to 2008-09.

Amazingly, all three new states have grown fabulously fast. Uttarakhand has averaged 9.31% growth annually, Jharkhand 8.45%, and Chattisgarh 7.35%. All three states belong to what was historically called the BIMARU zone, a slough of despond where humans and economies stagnated. Out of this stagnant pool have now emerged highly dynamic states.

I am supporter for smaller states, especially in South India/Tamil Nadu.

The End of (American) Influence

2009-12-29T08:09:00.000-08:00

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

2009-12-24T20:25:00.000-08:00

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

2009-12-10T02:03:00.000-08:00

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

2009-12-10T01:45:00.000-08:00

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

2009-12-07T20:34:00.000-08:00

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

2009-12-06T03:53:00.000-08:00

Gold Price Timeline

2009-12-04T08:07:00.000-08:00

Pranav Mistry: The thrilling potential of 'SixthSense' technology

2009-12-03T09:52:00.000-08:00

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

2009-12-03T09:49:00.000-08:00

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

2009-12-03T08:55:00.000-08:00

Dubai - A snapshot

2009-11-28T21:00:00.001-08:00

The Big Picture

2009-11-28T07:39:00.000-08:00

from the Big Picture

Changing the World's Living Condition

2009-11-21T19:43:00.000-08:00

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”

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

2009-10-13T08:27:00.000-07:00

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

2009-10-06T02:53:00.000-07:00

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

2009-09-30T09:23:00.000-07:00

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

2009-09-26T20:57:00.000-07:00

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

2009-09-26T05:29:00.000-07:00

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

2009-09-15T21:58:00.000-07:00

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

2009-09-08T21:09:00.000-07:00

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

2009-09-05T20:42:00.001-07:00

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.

Am I missing something?

2009-09-05T00:09:00.000-07:00

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

2009-09-03T03:01:00.000-07:00

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

2009-09-01T01:18:00.000-07:00

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'

2009-08-29T22:27:00.000-07:00

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

2009-08-26T06:30:00.000-07:00

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

2009-08-25T03:09:00.000-07:00

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

2009-08-25T03:03:00.000-07:00

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

2009-08-15T23:29:00.000-07:00

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

2009-07-30T21:01:00.000-07:00

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

2009-07-23T04:59:00.000-07:00

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?

2009-07-11T01:07:00.000-07:00

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

2009-07-07T08:54:00.000-07:00

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

2009-07-04T02:25:00.000-07:00

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

2009-07-03T01:37:00.000-07:00

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