And those who came second……..

I generally write on topics like economics, business and current affairs but this time I am bringing in something to think about. One day when I came back home from annual sports day of my school and told my parents that I came second in a competition; my father gave me a lukewarm response and asked me “who came first”. So does coming first means you’re the best? What about those who came second…..
The question above is just not related to you and me, it is about those things which came second but became the world’s best in their respective field. I am not much of a film critic but how many of you have seen the movie called Shawshank Redemption, a 1994 American drama film written and directed by Frank Darabont and starring Tim Robbins and Morgan Freeman. This movie according to IMDB and rotten tomatoes ranks among top 5 movies of the world. Shawshank Redemption is a perfect example of the title of this article “And those who came second”. Despite a lukewarm box office reception that was barely enough to cover its budget, the film received favorable reviews from critics, multiple award nominations, and has since enjoyed a remarkable life on cable television, VHS, DVD, and Blu-ray. The movie was nominated for seven Academy Awards in 1994 (Best Picture, Best Actor—Morgan Freeman, Best Adapted Screenplay, Best Cinematography, Best Editing, Best Original Score, and Best Sound Mixing) but, in the shadow of 1994's big winner Forrest Gump, did not win any awards.  In June 1997, TNT, an American cable network, showed the film for the first time. The film was the first feature in TNT's Saturday Night New Classics. Since 1997, TNT has shown the film about once every two months. In 1998, Shawshank was not listed in AFI's 100 Years...100 Movies, but nine years later (2007), it was #72 on the revised list, outranking both Forrest Gump (#76) and Pulp Fiction (#94). In March 2011, the film was voted by BBC Radio 1 and BBC Radio 1Xtra listeners as their favorite film of all time, beating others including Fight Club, Pulp Fiction and Back to the Future. So does that mean Shawshank Redemption which came second to Forrest Gump in Oscars is really the second best? If you think it’s not than read farther….
So let’s move from Entertainment to Art, “My Imagination is a Monastery and I am its Monk", this is my favorite line of my favorite poet John Keats. John Keats, whom we know for his Odes, considered being one of best romantic poets along with Lord Byron and P B Shelly. Keats whose literary work only published for four years (1816 to 1820) as he died at a very young age of 25. Although his poems were not generally well received by critics during his life, his reputation grew after his death to the extent that by the end of the 19th century he had become one of the most beloved of all English poets. Keats poetic works were heavily criticized during his lifetime. It is sad that Keats's publishers, Charles and James Ollier, felt ashamed of the first book he wrote. When Keats died at 25, he had been writing poetry seriously for only about six years. Aware that he was dying, he wrote to Fanny Brawne in February 1820, "I have left no immortal work behind me – nothing to make my friends proud of my memory – but I have loved the principle of beauty in all things, and if I had had time I would have made myself remembered." Shelley often corresponded with Keats in Rome, and loudly declared that Keats's death had been brought on by bad reviews in the Quarterly Review. He wrote
The loveliest and the last,
The bloom, whose petals nipped before they blew
Died on the promise of the fruit.
In 1848, twenty-seven years after Keats's death, Richard Monckton Milnes wrote the first full biography, which helped place Keats within the canon of English literature. In 1882, Swinburne wrote in the Encyclopedia Britannica that "the Ode to a Nightingale is one of the final masterpieces of human work in all time and for all ages". Critic Helen Vendler stated the odes "are a group of works in which the English language find ultimate embodiment”. Bate declared of To Autumn: "Each generation has found it one of the most nearly perfect poems in English" and M. R. Ridley claimed the ode "is the most serenely flawless poem in our language.
Now let us switch to entirely different field compare to literature, I don’t know how many of you know the name Ferenc Puskás. Ferenc Puskás was one of the best football player world has ever seen, played for Hungary and Spain. We all probably know Maradona, Pele, Zidane offcourse they are world top class players but you can’t deny the fact that they played football for some hugely popular football playing nations. Ferenc Puskás was equally talented but probably lesser known face among today’s youth, I have seen his vedio footages but generally I get to know about him from my father who is an ardent football follower. Puskás made his debut for Hungary team on 20 August 1945 and scored in a 5–2 win over Austria. He went onto play 85 games and scored 84 times for Hungary. His international goal record included two hat tricks against Austria, one against Luxembourg and four goals in a 12–0 win over Albania.
He became famous for his performance in 1954 world cup where he almost won the cup for Hungary. Puskás scored three goals in the two first-round matches Hungary played at the 1954 FIFA World Cup. They defeated South Korea 9–0 and then West Germany 8–3. In the latter game, he suffered a hairline fracture of the ankle after a tackle by Werner Liebrich, and did not return until the final.
Puskás played the entire 1954 World Cup final against West Germany with the hairline fracture. Despite this, he scored his fourth goal of the tournament to put Hungary ahead after six minutes, and with Czibor adding another goal two minutes later, it seemed that the pre-tournament favorites would take the title. However, the West Germans pulled back two goals before half time, with six minutes left the West Germans scored the winner. Two minutes from the end of the match, Puskás appeared to score an equalizer but the goal was disallowed due to an offside call. Though Puskás couldn’t win the world cup and he & his team came second in the competition but he became the hero of his nation.


So the purpose of this article is to let you know that, dignity is not in possessing but in deserving, the icons above mentioned may not be the winner in those days but they eventually become winner for ever.

Euro-debt crisis

Rashid, a daily wage earner from a village called Hailakandi in Assam knows it very well that although it is a season time and he is earning three times more than his regular income but spending lavishly will lead him and his family to trouble. Last year during holiday season he earned a lot but his spending trebled as a result he had to take loans which he is still paying. Thus, this season he has to work and pay for his past luxuries. This is a hypothetical case which is taken to draw an analogy with the Euro debt crisis for simplicity. Europe now for long has been living lavishly irrespective of productivity and income, apart from Germany and France most of the other member countries has a poor progress report to show when it comes to productivity and income. But when you are in Europe the spending habits and standard of living does not change whether you are in Paris or in Lisbon. Greece along with Ireland, Italy, Portugal and Spain known as PIIGS are in trouble for their overspending habits.

Greece who is considered to be in worst condition among other countries of PIIGS has somehow acted like Rashid in her glory days. The inception of Greek crisis started on 19 June 2000, the day when Greece joined EU. Although the decision was taken with a perspect of Greece’s prosperity but being a member nation Greece always have to follow monetary union guidelines. This are

1. Inflation rates: No more than 1.5 percentage points higher than the average of the three best performing member states of the EU.

2. Government finance:

Annual government deficit:

The ratio of the annual government deficit to gross domestic product (GDP) must not exceed 3% at the end of the preceding fiscal year. If not it is at least required to reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases.

Government debt:

The ratio of gross government debt to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to the specific conditions, the ratio must have sufficiently diminished and must be approaching the reference value at a satisfactory pace.

3. Exchange rate: Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period.

4. Long-term interest rates: The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest inflation member states.

Greece whose economy is not that strong and the country’s productivity merely depends on shipping and Tourism couldn’t keep up the pace with other more advanced European countries. By the end of 2009 the Greek economy faced its most severe crisis since the restoration of democracy in 1974 as the Greek government revised its deficit from an estimated 6% to 12.7% of gross domestic product (GDP). In early 2010, it was revealed that successive Greek governments had been found to have consistently and deliberately misreported the country's official economic statistics to keep within the monetary union guidelines. This had enabled Greek governments to spend beyond their means, while hiding the actual deficit from the EU overseers. In May 2010, the Greek government deficit was again revised and estimated to be 13.6% which was one of the highest in the world relative to GDP and public debt was forecast, according to some estimates, to hit 120% of GDP during 2010, one of the highest rates in the world. Thus all other weak members who couldn’t keep up with the guidelines and also misreported their fiscal deficit came into the picture. Why these countries deliberately misreported their economic statistics? – The answer although is simple, the various advantage of being a member of EU.

Rashid, whom we know already under severe loan, couldn’t earn enough to pay back. Thus confess in front of gram panchayat that he is bankrupt and cannot pay back the loan. Gram panchayat decided to bail out Rashid and asked everybody to contribute some amount; Gram panchayat also gave strict order to Rashid to control his spending. Thus Rashid was saved but question is did he learn his lesson, is there a guarantee that he will not again repeat the same mistake. This is again an analogy that we can draw on how EU or ECB has decided to bail out Greece. Greece declared that they need a bailout package as a consequence there was a crisis in international confidence in Greece's ability to repay its sovereign debt. In order to avert such a default, in May 2010 the other Euro zone countries, and the IMF, agreed to a rescue package which involved giving Greece an immediate €45 billion in bail-out loans, with more funds to follow, totaling €110 billion on the ground that Greece has to adopt the austerity plan**. Although IMF-drafted austerity plans also feel like a breach of contract for many ordinary Greeks, even those repelled when violence claims lives in Athens. Cutting civil-service pay seems unfair to officials who earn a pittance. There is anger in Brussels that it took until May 2nd for the euro-zone countries to put real money on the table: €80 billion ($105 billion) to meet Greece’s borrowing needs, topped up by €30 billion from the IMF. Senior officials blame Germany for the delay. They concede that Angela Merkel, Germany’s chancellor, has a defense: Greece would never have agreed to such an ambitious austerity plan if the bail-out had come sooner. Although many consider Germany of being selfish here but if you want an overall solution some strong steps need to be taken so that no other country repeats the same mistake that Greece did.

The proposal now being made by many in Europe to finance national government borrowing with Eurobonds rather than individual countries issuing sovereign debt and paying the risk premium the market demands for their particular situation, they would borrow through an EU wide institution, such as the European Financial Stabilization Fund (EFSF). Greece would sell its bonds to the EFSF, which would pay for them with funds raised by issuing its own Euro denominated bonds. EFSF bonds would be backed by the financial resources of the EU (all European member countries collectively) and would thus enjoy the credit rating of the EU rather than of Greece.

But no matter how many steps EU take to bail out Greece it would not pay off unless and until Greece takes some strong measures in terms of strong fiscal and monetary policies, sound financial budgeting and strengthening earning avenues. In the final analysis, Greece can only restore its credit worthiness and redevelop the trust and name in the world economy.

Krishanu Naug

Krishanu.naug@gmail.com

                                                              

FDI in Multi-brand retail in India

Revolutions are not made with rose water, this proverb suitably fit into the politics that is going on, on the issue of 51% FDI in multi-brand retail sector.  Almost majority of the opposition parties in India are against this bill. In spite of repeated assurances from UPA government that the decision will only benefit the country, the opposition is not even moved an inch from their present position, as if they got a magic potion before the UP state elections. Trinamool Congress the ally of UPA government whose main leader Mamata Banerjee known for her pro farmer ideology is also against the decision to open India’s retail sector to global giants such as Wal-mart stores. So obvious question is that - is 51% FDI in retail is good or bad for India?

The opening up of retail can be seen in two ways – one is small traders may bear the brunt on the other hand farmers who were for long time now not getting the  right price will be definitely get benefited. “Not only will FDI in retail eliminate four to five middlemen at different levels, it will also enable farmers to get quality inputs,” said Changal Reddy, the secretary-general of the Consortium of Indian Farmers Association (Cifa).

While a section of 40 million traders may get affected, 123 million consumers will gain from the move to allow FDI in multi-brand retail. If the latent mood reflected by farm lobbies gathers depth and sweep, the parties opposing FDI will have to choose between the small trader and the farmer. Almost all parties, including Mamata’s Trinamool Congress, arrayed against the retail reforms describe themselves as the best friends of farmers.

Why there is so much fuss about this issue? Where is the gap? Why farmers are complaining

·       Farmers get only one-third of the price consumers pay

·       Average price farmers receive for horticulture produce is barely 12 to 15% of the final price

·       Tomato farmers earn only 30%of the consumer price.

·       Potato farmers sell crop for Rs 2 to 3 a kg and consumer buys it for Rs 12-20.

So where is the leak, as Changal Reddy, the secretary-general of the Consortium of Indian Farmers Association (Cifa) said that intermediaries are responsible for the poor state of farmers. The decision of 51% FDI in multi-brand will benefit in following ways.

·        Intermediaries will be wiped out

·        Farmers will get right prices

·        Supply chain network will improve

·        The food wastages will go down.

·        50% FDI will be spend on backend process

·        Wal-Mart and other stores will bring high technology with them

·        Control over food inflation

·        Consumer will get essential products at cheaper price

·        With competition growing the quality of products will improve

·        Employment generation will get a boast.

·        Government will get revenue in terms of taxes.

      Disadvantages

·        Small traders will be affected

·        Marginal farmers may get nothing out of it.

·        Once mega stores like Wal-mart establishes they may dictate terms with farmers

As they say the only constant thing in this world is “change”. History shows that whenever a big change is about to take place there is always some kind of resistance that develops, be it opposing TV in 1980s, currency devaluation and liberalization of economy in 90s, nuclear deal in recent past. But history showed this changes made India more prosperous and strong.