The slowing down in Eurozone has global implications for American companies and this is likely to further affect the American economy which will directly have impact on the chances President Obama’s re-election
Spain became the fourth European country to get a bailout last weekend and though it was framed politely as a bailout for the Spanish banks it was difficult to hide the fact that it was a Spanish bailout. Portugal, Greece and Ireland have had received bailouts earlier. The Spanish bailout amounted to 100 billion euros whereas the Portugal bailout was 78 billion euros and the Irish bailout 67 billion euros. The biggest bailout was for Greece at 345 billion euros and Greece was not even grateful for it. There is a real possibility that after the elections on 17 June 2012 Greece would try to renegotiate the terms of bailout. But the Spanish bailout was the most serious of all as Spain is the fourth biggest Eurozone economy.
Further it was unlikely that the bailouts would give the so-called PIGS (Portugal, Ireland Greece and Spain) wings. The idea that the Euro was an irreversible project was suddenly in doubt. It was also clear that Spain would not be the last country in Europe requiring the bailout. There was talk of Cyprus being next and most worrying of all.
Much was uncertain but one thing was certain and that was the fact that the Europe was in crisis. Everyone was looking towards Germany for help. Germany was the only one with pockets deep enough to make a difference. German chancellor Angela Merkel was talking of deepening the Eurozone into a fiscal union but seeing the Greek reaction to the bailout that was unlikely to be greeted with hosannas. The question was how to deal with a multispeed Europe while a single currency is still open. Everyone is now wondering how no one thought it when the Eurozone was created. Some talked of a calibrated exit of Greece from the euro but no one really knew of all the consequences and no one was willing to take a chance. The freefall had been averted for the moment.
This has direct consequence for the US presidential election. The European Union and the US together account for half the world’s gross domestic product (GDP) and nearly a third of the trade flows. The slowing down in Eurozone has global implications for American companies. David Axlerod told Candy Crawely on the State of the Union programme on CNN that the “Storm clouds from Europe are on their way”. This is likely to further affect the American economy which will directly have impact on the chances President Obama’s re-election.
But along with economic mess Europe has had two elections in the last month—one in France the second largest Eurozone economy and the other one in Greece where the position of conservative was decisively rejected in favour of in policies of economic expansion. In France in Socialist Francois Hollande trounced the conservative President Nikolas Sarkozy to become president and in the Greek parliamentary election, the parties which supported the bailout failed to secure majority. A second election is to be held.
The conservative policies in Europe are not dissimilar to the Republican policies in the United States—they believe in running a tight fiscal shop with a smaller budget deficit and the stimulus in the economy comes by way of tax cuts. Whereas the socialist position is not dissimilar to the position of the Democratic party in the US which believes in growth through stimulating the economy through higher spending and reducing the fiscal deficit by taxing the rich.
So when the results came from Europe Bill Clinton seized the moment immediately and said “Why aren’t things roaring along now? And that is because the Republicans in Congress have adopted the European economic policies. But complicating the matter was the election for the recall of the governor Scott Walker in the mid-western state of Wisconsin where he had followed the policy of fiscal conservatism in extreme and he handily thumped the democratic challenger. Governor Mitt Romney was quick to seize the moment and announce that the message of Wisconsin was clear and that American did not want more policemen, firemen and teachers. These were the very things that President Obama wanted Congress to do shore up jobs.
But the most surprising thing was some urged a new Marshall plan for Europe but for that they looked not towards the United States of America with its 14.5 trillion dollar deficit but towards Germany.
The results from Wisconsin on the face of it could not be more different from the results in France. But look a little deeper and it makes more sense. France tried to resort to fiscal cutting after expansion of many years. And it is after fiscal cutting, the French are now seeking expansion. Wisconsin and may be America are at a different stage. After expansion they are seeking fiscal cutting. So it may well be that the message from Europe may not reach America.
(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)
Researchers found a strong association with daily sleep periods of less than six hours and a greater incidence of stroke symptoms for middle-aged to older adults, even beyond other risk factors
Sleeping less than six hours a night habitually ups the risk of stroke among middle-aged people and old adults despite having normal weight and low risk of obstructive sleep apnea (OSA), researchers from the University of Alabama at Birmingham found out. However, the study found no link between short sleep periods and stroke symptoms among overweight and obese participants.
Megan Ruiter, lead author of the study, said, “In employed middle-aged to older adults, relatively free of major risk factors for stroke such as obesity and sleep-disordered breathing, short sleep duration may exact its own negative influence on stroke development. We speculate that short sleep duration is a precursor to other traditional stroke risk factors, and once these traditional stroke risk factors are present, then perhaps they become stronger risk factors than sleep duration alone.”
The study was released at SLEEP 2012, which examined 5,666 people and all of them were followed for up to three years. At the start of the study, participants had no history of stroke, transient ischemic attack, stroke symptoms or high risk for OSA. Researchers recorded the first stroke symptoms, along with demographic information, stroke risk factors, depression symptoms and various health behaviours. SLEEP is an annual event, organised jointly by the American Academy of Sleep Medicine and the Sleep Research Society, which brings together leading clinicians and scientists in the fields of sleep medicine and sleep research.
According to the researchers, after adjusting for body-mass index (BMI), they found a strong association with daily sleep periods of less than six hours and a greater incidence of stroke symptoms for middle-aged to older adults, even beyond other risk factors.
Ms Ruiter believes that further research may support the results. It would also provide strong argument for increasing physician and public awareness of the impact of sleep as a risk factor for stroke symptoms, especially among persons who appear to have few or no traditional risk factors for stroke.
“Sleep and sleep-related behaviours are highly modifiable with cognitive-behavioural therapy approaches and/or pharmaceutical interventions. These results may serve as a preliminary basis for using sleep treatments to prevent the development of stroke,” she explains.
In statement released by American Academy of Sleep Medicine, Ms Ruiter and her colleagues collected their data as part of the Reasons for Geographic and Racial Differences in Stroke (REGARDS) study, led by George Howard, PhD, of the University of Alabama at Birmingham School of Public Health. REGARDS enrolled 30,239 of people ages 45 and older, between January 2003 and October 2007, and is continuing to follow them for health changes.
The study is funded by the National Institutes of Health (NIH) National Institute of Neurological Disorders and Stroke.
Removal of subsidies of all kinds, including those on petro-products, and tackling corruption can help India to return to a GDP growth rate of 9%
Deteriorating macro-economic fundamentals, rising fiscal deficits, persisting high inflation rate has resulted in economic slowdown due to political roadblocks in policy making. Global ratings agency Standard & Poor's (S&P) cut down India's sovereign rating of BBB to Negative from Stable in April. It rightly points out "The crux of the current political problem is the leadership crisis at the very top on account of the division of roles between the Congress Party president and the prime minister and not 'obstreperous' allies or an 'unhelpful' opposition -paramount political power rests with the leader of the Congress Party, Sonia Gandhi who holds no Cabinet position, while the government is led by an unelected prime minister, Manmohan Singh.
It is rather disturbing to see India passing through a grave situation of rising food inflation, moral degradation and rampant corruption making its millions of average citizens, all living below poverty line, a suffering meek lot. All only because of the sheer ineptitude of governance at the Centre. The netas have been for long lulling the janata in a false sense of security of a great growth story that has gone all sour. The country's chief economic adviser tells us to wait till 2014 and later controverts it all!
Among the worst of the lot are the all powerful, highly privileged and grossly over-paid highly corrupt neta-babus who are rewarded with sumptuous allowances, free houses, phones, and red-topped cars. Invariably they are local political bosses who are corporators, legislators and parliamentarians, many with criminal records. They have abandoned all pretence of governing their fissiparous country to engage in shameless personal enrichment with self-serving abandon-merrily stealing and lying on oath not out of fear and favour. They are opportunists, pure and simple, relentlessly indulging in predatory looting and plundering of nation's resources. They have detached themselves from purposive governance to attain societal goals essentially on their own selfish terms without any discernable impact on policy outcomes. They fail to connect effectively with the citizenry at large-a clue to a growing disjuncture.
Corruption and patronage have blunted India's efforts to pull the poor out of poverty. According to an authoritative study, the pocket borough of the Nehru-Gandhi's Rae Bareli in Uttar Pradesh with 70.40%, Koraput in Odisa with 68.86% and Dumka in Jharkhand with 63.65% have the highest number of stunted children. The worst of concerns of poverty across the country are hunger, malnutrition, absence of even the basic amenities like toilets, sanitation, quality drinking water and primitive infrastructure-bad roads and absence of even a primary education and health centre. It is to be seen right here, not more than 60km from Mumbai in the tribal area near Jawahar.
At the same times of grinding poverty, the number of our crorepati MPs increased from 156 in the 2004 Lok Sabha to 315 in 2009; the number of MLAs in Manipur shot up by 563% over the last five years. God alone will know how they will appear in 2014! Where does all the money come from? It is plain and diverting by swindling by openly selling foodgrain meant for malnourished kids to poultry and animal feed dealers, siphoning of funds from welfare schemes like the multi-crore Bharat Nirman and the Mahatma Gandhi National Rural Employment Guarantee Scheme where the netas, babus, dalals and local district officials pay only a fraction of the guaranteed wage of Rs100 per day based on whether they really 'qualify' under the scheme-a very subjective assessment, vulnerable to abuse and source of massive graft. A study by the Asian Development Bank (ADB) and Indian Statistical Institute reports that just 10% of the foodgrain reach the deserving poor under the Public Distribution System, 43% is siphoned off illegally, large quantities simply rots as silos to store foodgrain are full, what is left is eaten by rodents and most exposed to the elements. Rajeev Gandhi, way back in 1986 said that only 15% of allocations reach the beneficiaries, his son Rahul brings it to a dismal 6% today. The NAC-approved Food Security Bill is hanging fire with the agriculture ministry. The heavily underestimated subsidy bill for 2012-13 has spiraled over to a whopping Rs1,09,000 crore swallowing 25% of the budgeted direct and indirect tax revenue of Rs7.7 lakh crore net of allocations.
According to experts, removal of subsidies of all kinds, including those on petro-products can help India to return to a gross domestic product (GDP) growth rate of 9% by creating productive assets in the other India wherein the millions live in the countryside, by helping the poor build independent livelihood. There is an urgent need to boost food productivity and cut out middlemen in the food chain. Taxing the rich farmer, which has been avoided to attract rural vote banks, is really an overdue measure.
Compounding it all are the exposés of scandal after scandal with skeletons tumbling out of the cupboard of liberalization and privatization. All short-changing the people, plundering public wealth and enriching the select neta-babu pockets by entrenched interests in a culture where everyone suspects and no minister and bureaucrat trusting another- all leading to stalling the economy from the lack of decision making. The major corruption scams allege $500 million rice export, $1.5 billion Commonwealth Games, $40 billion 2G spectrum and many yet to come to light, not to forget Laloo's fodder scam, undecided because of high political stakes.
Needed to add to this are the self-seeking educated class, heading towards moral and intellectual bankruptcy, forgetting self-restraint and sacrifices so essential for nationhood. It is well-known that our top-notch professionals attorneys, surgeons, movie stars, designers demand huge sums in cash and don't issue any receipt. Down the line plumbers, painters, carpenters, shopkeepers collect cash and avoid taxes.
Not all that Kejriwal & Company had collected came by way of crossed cheques. He is reluctant to put India Against Corruption's (IAC) audited or unaudited income and expenditure on public domain. If they really have the interests of the nation at heart, rather than bark up the wrong tree of fasts and dharnas, they ought to come out with concrete ways and means to curb black money, to stem the flight of our funds abroad through pro-active vigilante movement of taking the bull of black money and its sibling corruption by the horn.
The Planning Commission, a top heavy Nehruvian Soviet-era white elephant, is caught recklessly indulging in huge spending and thereafter offering inane unconvincing explanations for spending over Rs2 lakh a day on foreign junkets and also incurring Rs 35 lakh on e-toilets exclusively for its high-ranking babus, even as millions live and defecate on the roadside and in the fields, in most insanitary conditions. The former chief minister of Goa has installed an air-conditioned sensor-operated toilet spending Rs20 lakh in his constituency of Margao and spent a lot of time in justifying it at an assembly debate.
These days press reports highlight that the present rudderless leadership is belatedly waking up too late to realize how much it has fallen back from the high water mark of the dream of taking the GDP growth to double digit territory in stead only to find it sliding rapidly in the reverse-the steeply falling stock prices, the rupee: dollar parity going adverse, dipping industrial production and exports resulting in domestic inflation sky-rocketing-all hitting the aam admi's food bills very hard. Pranobda, the senior-most and finance minister, is said to have stayed away from the PM's austerity measures meeting. After all austerity, per se, is not seen to be applicable to the president-present and the would-be one too!
A lot of Indians are really rich; all itching to figure in the Forbes' List of the World's Richest but at the same time the real Other India continues to remain poor, the poor getting poorer! The White Paper on Black Money dubbed by experts as a Blank Black Paper has mysteriously and miserably failed to pin-point the quantum of black money, even when there are enough estimates of the black money in circulation. The so-called reduction of Indian money stashed in Swiss banks deposits from Rs23,373 crore in 2006 to Rs9,296 crore in 2010 (God alone knows why were the latest numbers of 2011 or 2012 are not sought?) remains unsubstantiated. With enough notice has it been moved elsewhere or to other entities or rerouted via the FII/FDI routes? With India getting poorly rated downwards investor confidence in the economy waning-FIIs have been seen to withdraw and some Indians going back to Switzerland and newer tax havens-New Zealand is said to be the latest venue.
Ever since the 2005 Comprehensive Economic Co-operation between Singapore and India was operationalized, the tiny Singapore with a population of 6 million is the second highest investor with 9.71% of FDI with investments to the tune of $15.67 billion between April 2006 and November 2011. The Indian Ocean island of Mauritius has 41.8% between April 2000 and March 2011. Both of them even put together, are in no position to generate funds of this order but seen to simply act as convenient conduits for laundering by round-tripping the Indian black money. Surely the High Powered Task Force could have accessed them to arrive at reasonable guestimates.
The hitherto considered clean PM is perceived to be a dummy without any power as authority lies elsewhere. The Team Anna that held Parliament to ransom over Lok Pal has thrown up new black sheep within with Kejriwal and Bedi accused of accounts fudging, Shanti Bhushan forced to cough up crores with heavy penalty on default of evaded stamp duty on property purchased and son Prashant questioning J&K accession. Anna is hijacked by his team with a dubious Sarkari Sadhu, Ramdev joining the bandwagon despite multiple economic charges against his entities. All making it the pot calling the kettle black!
PPPP now has a new nomenclature of Public-Private-Philanthropic-Participation. More and more purely individual western philanthropic initiatives have been playing significant roles by coming in to funding areas traditionally reserved for governments providing socially valuable inputs and at the same time not expecting financial gain in return. We owe our Green Revolution to the Rockefeller Foundation which supported Dr Norman Borlaug in developing newer strains of wheat. Since 2003 the Bill & Melinda Gates Foundation has invested over $1.2 billion in India-much of it in public health programmes focusing on immunization, maternal, neo-natal, childcare and HIV prevention. It is rightly pointed out that this kind of philanthropy, where the businessmen give for public goods in collaboration with government agencies, is quite rare in India. Not that it is unknown-the house of Tatas funded the Indian Institute of Science in Bengaluru, TIFR and Tata Cancer Hospitals in Mumbai and Kolkatta. There are others like the Ramakrishna Mission which is already doing good work and highly qualified people of Indian origin waiting for favourable climate to pump in funds into India.
Surely more needs to be done with a dozen Indian tycoons figuring in the Forbes List of the World's 200 Richest. Public health, sanitation and elementary education are areas that government can provide resources like land on a large scale. But that should not stop it from creating favourable markets for the wealthy to chip in with their financial and managerial resources in projects delivering only high social returns. It has to be a win-win situation for all.
In this Not-for-Profit-Partnership, the donor-partner should also be given a say in how and what scheme their money is to be spent. The fund-strapped central government needs to seriously consider this as a means to bring in social changes by mitigating health and other serious concerns.
(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)