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Saturday, June 4, 2011

Western economies can learn from India: Amartya Sen

At a time when several economies in the western world are facing severe crisis, Nobel laureate Amartya Sen believes that they can learn from countries such as India and China which are witnessing rapid economic growth.

Launching the Sanjaya Lall Visiting Professorship of Business and Development at the Said Business School of the University of Oxford, Sen said at a panel discussion last evening that there was much that the developing countries could contribute at the 'level of ideas' to ongoing economic debates in the western world.

The panel led by Sen included Martin Wolf of the Financial Times, and Robert Wade, professor of Political Economy and Development at the London School of Economics.

"I am concerned with what is happening in Europe. There are a few things that they can learn from the developing world; for example, the importance of growth in generating public revenue. Going straight at budget deficit cuts growth," Sen said, without mentioning the ongoing major public spending cuts in Britain to reduce budget deficit.

It was a reflection of the state of affairs, he said, that the dominant figures in public discourse in the west were not democratic figures but bankers.

Noting that Europe had done much to develop and further democratic norms in the last 300 years, Sen, however, said that at the current juncture in world history, the "mantle of democracy is now very much strongly held by India".

He reiterated India's commitment to democracy and to implement economic measures within a democratic framework.

Lauding the work of Patna-born Sanjaya Lall in the field of economic and business, Sen said his impact on economics was "truly fantastic". A prolific writer and researcher, based at Oxford, Lall was considered one of the world’s foremost development economists.

The visiting professorship, awarded to Professor Wade, has been made possible by generous gift from the Sanjaya Lall Memorial Fund, whose trustees include Ramnique Lall and Lord Meghnad Desai. The visiting professorship is for a period of one Oxford term; the holder is expected to deliver a public lecture and encouraged to contribute to other scholarly activities.


Friday, May 27, 2011

India could be world’s 3rd largest economy by 2030: StanChart

The country’s demographic advantage, with half its population below the age of 25 years, with rising per capita income will ensure strong domestic demand.India could emerge as the world’s third largest economy by 2030, benefiting from strong domestic demand and favourable demographics.However, the banking entity noted that country’s reform agenda need to be sustained for achieving high growth.


“India has the fundamentals to emerge a winner in the super-cycle, potentially becoming the world’s third-largest economy by 2030... India is likely to grow faster, on average, than China over the next two decades,” Standard Chartered Global Research said in ‘India in the Super Cycle.In 2010, the world’s major economies were US ($14.6 trillion), China ($5.7 trillion) and Japan ($5.4 trillion). India did not figure among the top ten, as per International Monetary Fund data.

By 2030, StanChart said India will be at number three position with an economy of $30.3 trillion, behind China ($73.5 trillion) and US ($38.2 trillion).It said that the country’s demographic advantage, with half its population below the age of 25 years, with rising per capita income will ensure strong domestic demand.“India has many of the features that will enable it to emerge as a winner in the super-cycle. We believe the winners will be those countries which have cash, commodities, or creativity, or a combination of these factors. India does not have an abundance of cash or commodities, but it has creative potential,” it said.

StanChart said India has potential to catch up with China and the developed world.
“Based on our forecasts, India’s nominal GDP could top $30 trillion by 2030, against its current level of around $1.7 trillion. By 2030, India could be 8.4 times bigger than it is today, while China is estimated to grow 4 times bigger and the EU and US 1.7 times,” it said.The banking giant said that within India there is often a hesitation to anticipate the ability of the economy to grow at a faster pace.

“Often, consensus views of India’s growth potential turn out to be too pessimistic. Thus, trend growth has often been assumed to be lower than that which materialises.Taking all of these factors together, our 9.3% projection for average Indian growth until 2030 may prove conservative. Trend growth, in my view, could even be nearer 12-13% per annum,” it said.By Super-Cycle, StanChart refers to the major periods of global economic growth.The first super-cycle took place from 1870 till the eve of the First World War in 1913 and saw the United States jumping from the fourth position to become the world’s largest economy.

Monday, May 23, 2011

Ratan Tata clarifies comments on Ambani home

The disparities in everyday living are now opening up large debates both at home and abroad.

Tata Group chairman Ratan Tata’s purported remarks expressing surprise at fellow industrialist Mukesh Ambani living in a billion-dollar mansion in Mumbai has sparked off a controversy. Mr Tata was quoted by London’s Times newspaper as having said, “It makes me wonder why someone would do that. That’s what revolutions are made of. The person who lives in there should be concerned about what he sees around him and [asking] can he make a difference.

“If he is not, then it’s sad because this country needs people to allocate some of their enormous wealth to finding ways of mitigating the hardship that people have.”

However, a day after his remarks on Mukesh Ambani's residence in Mumbai, the Tatas disputed the reported attribution to its chairman, saying that the comments were taken out of context and factually incorrect.

“The report is out of context and factually incorrect. Mr Tata's comments on wealth are in the larger context of the growing disparity in the society. The comments seem to have been deliberately sensationalised,” the company said.

Top CEOs – while choosing not to comment on the specific controversy – agreed that the widening disparity needs to be addressed , either through what some call conscious capitalism, or through greater  corporate social responsibility‎.

“I know disparity is high. I think conscious capitalism is a way forward. Corporate have to look at all shareholders and consciously invest in all shareholders,” said FICCI president Harsh Mariwala.

“There are few corporates who have done something in the fields of education and health. I am hopeful that the Corporate India will rise to this occasion. Also, if we can ensure that all sections of society benefit from India's growth, we will have sustainable growth,” said Naina Lal Kidwai, Group General Manager and Country Head, HSBC in India.

RIL has chosen not to comment on the issue. In April this year, Mukesh Ambani had said that the purpose of business cannot solely be profit and entrepreneurs need to have a larger purpose.

Sunday, May 22, 2011

Real estate adds Rs 1 lakh cr to Delhi's GDP in FY11


Real estate services added over Rs one lakh crore to Delhi's GDP of Rs 2.58 lakh crore in FY11, emerging as top contributors to the city's economy and reflecting the rapid growth and buoyancy in the sector.
The real estate sector, which includes property brokers, home buyers, land owners, property owners and housing finance institutions, contributed 39.69% to the gross state domestic product (GSDP) of the city at current prices, according to latest Delhi Government statistics.



The contribution of the sector has gone up to Rs 1.02 lakh crore in FY11 compared to Rs 35,885 crore in FY05, registering annual compound growth of 19.16% in the last six years.
According to global real estate consultant Jones Lang LaSalle, the sector will witness further growth with most companies operating in the city firming up expansion plans or executing real estate growth plans with upswing in the economy.
Reflecting the buoyancy in the sector, it said overall Delhi and National Capital Region witnessed a net absorption of 1.63 million sq ft of property space (151,755 square metre) in first quarter of the year.

The significant performance by the sector has largely been attributed to increased demand for commercial property by companies for office space and business activities leading to robust rental growth.

"The sector has potential to grow further provided the city government and the Centre relax certain norms for use of land for property development," said Pradeep Jain, chairman of Confederation of Real Estate Developers' Association of India (Credai).

As per Delhi government data, the contribution of the tertiary sector comprising hotels, restaurants, banking, insurance, legal services, real estate at current prices was Rs 2.12 lakh crore in FY11, which is 82.27% of the GSDP.
In FY11, the contribution to GSDP by hotels and restaurants and related trade was estimated at Rs 48,413 crore, which was around 18.71% of the total GSDP of the city.According to figures, share of primary sector comprising agriculture, livestock and forestry to GSDP in FY10 and FY11 has decreased by 0.72% and 0.61% at current prices.

Further, the contribution of secondary sector comprising manufacturing and construction has decreased from 18.45% during the base year FY05 to 17.44% and 17.11% in FY10 and FY11 respectively.

At Rs 2.58 lakh crore, the gross state domestic product of the city went up by an impressive 10.53%, increasing from 10.28% in the previous fiscal. 
Delhi's GSDP in FY10 was Rs 2.18 lakh crore.


As per the statistics, the per capita annual income in the national capital has increased by 7.68% to Rs 95,943 in FY11, which is almost three times the national average.

The per capita income of an average person in FY10 at constant prices was Rs. 89,037, according to a report released by Delhi Chief Minister Sheila Dikshit, who also holds the finance portfolio.
Delhi has a population of 1.67 crore, according to the latest Census.

On a monthly basis an average Delhiite earned Rs 7,995.25 in FY11 against the national average of Rs 3,000 as per the advance and quick estimates based on constant prices, which reflects data factoring in inflation.
However, on the current prices, without factoring in inflation, the per capita income of Delhi worked out to Rs 1.35 lakh as compared to national average of Rs 54,527.

In FY10, the per capita income of the city at current prices was Rs 1.17 lakh and it occupied the third position after Goa and Chandigarh, where the per capita income was Rs 1.32 lakh and Rs 1.20 lakh respectively.

Friday, May 20, 2011

$10 billion investment fund discussions attract major investors


From: Russia
Representatives of major global investors worth more than $2 trillion met with Russian Prime Minister Vladimir Putin, ahead of the launch of a $10 billion Russian investment fund at the St Petersburg International Economic Forum.
The fund, which will see the state commit $2 billion per year over five years, and co finance up to 20% of the cost of development projects, will be headed by former Icon Private Equity president Kirill Dmitriev.  Speaking with RT Business at the meeting Dmitriev said the plan of the fund was to attract up to $90 billion of international funding to Russia on a long term basis.

“Our goal is to attract $50 to 90 billion of co-investments from the leading funds in next 5 years. I think that it’s really important for them to get a good rate of return in Russia and in this way they will keep investing. And today the confidence that was given to investors by Prime Minister Putin is a catalyst that will help to significantly increase the investment inflow into the Russian economy.” 

The plan for the fund was announced earlier this year by Russian President Dmitry Medvedev, who is promoting moving the Russian economy away from its dependence on commodity, particularly energy exports.

Amongst other major investors, senior figures from Goldman Sachs, Blackstone, Abu Dhabi Investment Authority, Kuwait Investment Authority, China Investment Authority, Permira and Caisses des Depots attended the discussions. With Russia generally seen as a higher risk investment destination, it warrants higher premiums and is considerably more volatile than senior economic figures would like.

Bader Mohamed Al-Sa’ad, Managing Director of the Kuwait Investment Authority, said that he thought the move by the government to create the fund would encourage more conservative longer term, investors to an economy that he saw on the frontier of growth.   

“We think that Russia has all the factors and all the capabilities to be a frontier in the growth market.  For us in KIA, we have something like $600 million investment, and I think this invitation to join the direct investment fund will give us the opportunity to increase our direct investment.  We think that there is a lot of interesting companies – there is interesting sectors in Russia.  This will give us the opportunity, and the confidence, because we think the government would commit $10 billion – this is a unique concept in the private equity investment.  This is probably for us, a conservative long term investor, it will give us the comfort to join the Russian government jointly at the same terms to be investors in the Russian economy.”


Laurent Vigier, Director of European and International Affairs, at Caisse des Dépôts Group said he thought the proposals could play a key part in broadening the perception of investing in Russia.

“What you see is that Russia is not only an economy based only on gas or oil.  Russia has a very educated population, very smart people, and there are many sectors of interest.  We have seen in the agribusiness, in the pharmaceutical industry, in the aeronautics and the infrastructure, there are many opportunities in Russia.  We have to change our view on this country it is a diverse economy it is a major partner, and for Europe and for France, this is certainly something we have to factor in.”


Vigier added that the proposal by the government to commit large scale funding to attractive private and institutional investors from around the world had received a positive reception.

“I think that all the participants at this meeting were very impressed by the dedication of the Russian government to promote long term investment in the development of the Russian economy.  The Russian economy appears certainly to be the next big thing on the global investment map.  We have to seize these opportunities and it’s a bold movement by the Russian government.  This new scheme is very innovative.” 

At the meeting the investors discussed Russian economic strategy and its investment climate with the Prime Minister, as well as particular investment interests.  Spokesman Dmitry Peskov indicated that no formal commitments had been made but ahead of the meeting the head of VEB, the state development bank (Vneshekonombank), Vladimir Dmitriev indicated one group, unspecified had already indicated it would look at allocate $1 billion to the fund.

Thanks to RT News

Thursday, May 19, 2011

Unemployment filings decrease in May


Related:

 Economic Snapshot


The number of people filing for unemployment decreased this month both nationally and in Wisconsin, according to U.S. Department of Labor data released Thursday.

Nationally, 409,000 people filed for unemployment during the second week of May, compared with 438,000 the previous week. In Wisconsin, 3,556 fewer people filing claims during the first week of May than in the last week of April.

However, 3.9 percent of Wisconsin’s work force had unemployment insurance at the end of April, tying Wisconsin for fifth-highest of any state. Alaska ranked highest with a rate of 5.8 percent. The nationwide seasonally adjusted rate was 3 percent.


Thanks to Business Journal.

ManpowerGroup: Employers struggling to find qualified workers


Related:Human resources

A new study by ManpowerGroup has found that one in three employers globally are experiencing difficulty filling jobs due to lack of available talent, the highest percentage since before the recession began in 2007.

Ninety percent of employers cite candidate-specific factors behind the challenge of filling mission-critical roles — including a lack of necessary skills and experience, insufficient qualifications or a lack of soft skills.

“As the chaos and complexity of the post-recession era have irrevocably changed the way the world works, employers can no longer solely rely on a ‘just in time’ approach to hiring, expecting ‘on-demand’ talent to be available wherever and whenever they need it,” said Jeff Joerres, chairman and CEO of Milwaukee-based ManpowerGroup (NYSE: MAN), a global staffing and employment services firm.

“It would be unthinkable for a company to plot its growth strategy without identifying a sustainable supply of raw materials, so employers must ensure they have the talent in place to support their business goals.
"
Regionally, employers in the Americas are having more trouble filling jobs than the global average, with 37 percent of employers reporting difficulty filling positions due to lack of available talent.

The most difficult jobs to fill globally are technicians, sales representatives and skilled trades workers, according to ManpowerGroup’s survey of almost 40,000 employers across 39 countries and territories. These are the same jobs that employers have reported having difficulty filling for the past four years, underlining the need to re-evaluate how they are recruiting for these positions, according to ManpowerGroup management.

The most difficult positions to fill in the Americas closely resemble those on the global list, with technicians, sales representatives, skilled trades workers and engineers leading the list of difficult vacancies. Vacancies for technicians are the most difficult to fill in the Americas for the fourth consecutive year.




Thanks to the Business Journal of America.

Tuesday, May 17, 2011

IMF chief faces pressure to resign as scandal ripples across Europe


New York (CNN) -- The head of the International Monetary Fund, jailed on charges of sexual assault of a chambermaid in his New York City hotel suite, should consider stepping down for the good of the institution, Austria's finance minister said Tuesday.
"Given the circumstances that his bail was not granted, he should think about whether he is damaging the institution," Maria Fekter told reporters in Brussels, Belgium, during a meeting of European finance ministers.
Dominique Strauss-Kahn, 62, was denied bail by a Manhattan Criminal Court judge and remanded Monday to an 11-by-13-foot cell at New York's Rikers Island jail complex. There, the man whom many refer to as DSK was placed on suicide watch -- a common procedure in high-profile cases, two sources with direct knowledge of the case told CNN.
The case has shaken the IMF, an organization of 187 countries working to improve world economies by providing loans and guidance. It has also shaken the political world in France, where the Socialist Party politician was considered a front-runner to unseat President Nicolas Sarkozy.
But until his next court appearance Friday, Strauss-Kahn will neither be working to save world economies nor to endear himself to French voters. Instead, he will be largely left alone -- denied contact with other inmates because of his high-profile status, said a New York Department of Correction spokesman who declined to be named.
Ahead of Tuesday's meeting to address the Greek debt burden, Spanish Finance Minister Elena Salgado said the alleged crimes of the IMF chief were "very serious" and suggested letting "justice take its course  Ireland, Minister of Foreign Affairs Eamon Gilmore called the incident a "disruption."
"There's no doubt that an event like that does cause a disruption in the functioning of a body like the IMF when its senior figure is arrested," Gilmore said. "We have to wait and see how that works out, and we have to respect the legal process which is under way in New York."
British Foreign Secretary William Hague, who was with Gilmore in Dublin, told reporters he hopes the incident does not affect the "many important decisions ... before the IMF."
"At the moment it is important that it functions well," Hague said. "So we look to all concerned to make sure that it does."
Irish Prime Minister Enda Kenny said he was confident the scandal would not affect the organization's broader mission.
"Ireland as a country deals with the IMF as an institution," Kenny said. "We don't get involved in any individual situations."
In Washington, U.S. Sen. John Kerry told reporters the situation involving the IMF chief was "very troubling, if not damning."
"You've got to give it a few days to let that develop. But if the evidence is what it appears to be, I think it would be very difficult for him to manage."
On Tuesday, IMF spokesman William Murray said in a written statement that the IMF had had no contact with its leader since his arrest. In Strauss-Kahn's absence, First Deputy Managing Director John Lipsky has been named acting managing director, "and the fund continues its normal work," Murray said.
Murray also said Strauss-Kahn's diplomatic immunity does not apply in the sexual assault case.
"The MD's (managing director) immunities are limited and are not applicable to this case," he said.
He added, however, that any IMF-related documents Strauss-Kahn may have had with him or left in the hotel room would be governed by diplomatic immunity and should be returned to the Washington-based organization.
A former French finance minister, national legislator and economics professor in Paris, Strauss-Kahn became the IMF's 10th managing director in November 2007. He is also chairman of the IMF executive board.
The alleged victim is a 32-year-old single mother living in the New York borough of the Bronx who moved to the United States from the West African country of Guinea. She had been working at the hotel for at least two years, according to her attorney, Jeffrey Shapiro.
"Her world has been turned upside down," he said. "She is very scared about her future."
Shapiro said his client is cooperating with police and prosecutors, and would be willing to testify against Strauss-Kahn.
Strauss-Kahn's accuser picked the IMF chief out of a lineup Sunday at a New York police station, saying he was the man who had sexually assaulted her, according to a law enforcement source with direct knowledge of the investigation.
"She's recovering -- slowly," said Blake Diallo, the general manager of a Harlem restaurant she frequents, who described himself to reporters as her friend.
The alleged attack began Saturday around noon, when the housekeeper entered Strauss-Kahn's $525 suite on the 28th floor of the Sofitel Hotel in Midtown to clean.
New York Police Deputy Commissioner Paul Browne said the economist emerged naked from a room, ran down a hallway after the woman, and attacked her.
He shut the door, preventing the woman from leaving, according to a criminal complaint released by prosecutors.
"He grabbed the victim's chest without consent, attempted to remove her pantyhose" and forcibly grabbed her between her legs, the complaint said. He also forced her to perform oral sex on him, Assistant District Attorney John McConnell said at Monday's arraignment.
The criminal complaint alleges that Strauss-Kahn forced the woman to engage "in oral sexual conduct and anal sexual conduct" and tried to force her to engage in sexual intercourse.
He faces charges that include two counts of first-degree criminal sexual act, one count of first-degree attempted rape, one count of first-degree sexual abuse, one count of second-degree unlawful imprisonment, one count of forcible touching and one count of third-degree sexual abuse.
The most serious charge, criminal sexual act in the first degree, carries a maximum sentence of 25 years in prison.
Afterward, the employee went to the front desk, and staffers alerted police, Browne said.
By the time officers arrived, Strauss-Kahn had left in the hotel limousine, according to the law enforcement source.
He called the hotel around the same time police got to the hotel to say he had left his phone behind and asked if it could be delivered to him at the airport. Investigators told the hotel staff member to agree to do so and police went to the airport.
Two plain-clothes Port Authority police detectives led him off the plane, the source said.
Strauss-Kahn's attorneys pointed to their client's lack of a criminal record and the fact that his daughter lives in New York as evidence that he was not a flight risk.
Defense attorney Benjamin Brafman called the case "very defensible."
But Criminal Court Judge Melissa Jackson sided with the prosecution in characterizing Strauss-Kahn as a flight risk and denying him bail.
The impact of his arrest has perhaps been strongest in France, where Strauss-Kahn, where the Socialist Party leader had been considered a strong challenger to Sarkozy.
But some observers said Tuesday that his political future appears bleak. "If the accusations are true, Strauss-Kahn will not be able to run for president," said Jacques Attali, a political analyst and a former top aide to late Socialist President Francois Mitterrand.

Thanks to CNN.

NR Narayana Murthy isn't a happy man


SBI's poor Q4 results rattled the Dalal Street yesterday and worsened the market sentiment. However analysts are still bullish about banking stocks and said SBI was just a one off phenomenon. Experts believe the market is still in the correction phase. Globally the picture is still confused about the unstable commodity market and the overall recovery. On the other hand, Asian markets are currently trading firm in the morning.  Here is a live update of what is happening around the business world.
10.00am: Emerging nations now want more transparency in the selection of the next IMF boss. IMF Chief Strauss-Kahn who was touted to be the next President of France was arrested on attempted rape charges. The world's fast-growing developing economies have lobbied aggressively for an overhaul at the IMF and have expressed growing frustration at being shut out of the process on who runs the global institution. A long-standing agreement between the United States and Europe has ensured that a European has always headed the IMF and an American its sister organisation, the World Bank.
9.15am: Markets opened on a stable note. Sensex opened 38 points up at 18171 and Nifty also stabilised at 5451. SBI that got hammered after poor results, the stock today opened weak down 1.5%. 
8.45am: Infosys founder and mentor Narayan Murthy isn't a happy man. His brainchild Infosys is going through a tough phase. The outgoing Chairman of the company says he lost several nights of sleep recently after his company was accused of violating business ethics. In a long and emotional farewell letter to shareholders , Murthy, who retires from Infosys in August this year, also expressed pain at the exit of some co-founders. Infosys announced a management rejig on April 30 where it announced banker KV Kamath as the new Chairman. An American employee of Infosys has filed a case against the Indian company accusing it of systematic visa and tax fraud to increase profits
8.15am: A Merrill Lynch survey says shows that while fund managers are increasing their allocation to the emerging markets, India is one of their least favoured markets. "Investors are underestimating some of the structural issues that could come through in the next few years," said John-Paul Smith, Deutsche Bank global markets strategist. India is currently battling the inflation issue which is seen as a big threat to growth. FIIs have been pulling out of the market due to a bearish sentiment.