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.

Globalization and its ugly faces

On January last year my uncle had ordered a couch on Amazon.com, the couch was manufactured in Hongkong , put on sale in US’s largest e-commerce site, shipped from  Bedfordshire UK  and was received at Chennai, India. This international exchange is just one example of globalization, a process that has everything to do with geography. Economies of the world are being increasingly integrated as mobile phones and the Internet have brought people closer. The world is becoming a smaller place, thanks to the goods, which were once confined to western countries, are available across the globe today. Globalization is the buzzword of today, with writers like Thomas Friedman giving an insight of the concept globalization through his immensely popular book called ‘The world is flat’. Amid all this fuss few issues which put a big question mark in front of globalization need a close look.

Once Jimmy Carter, former US president and a Nobel laureate said “Globalization, as defined by rich people like us, is a very nice thing... you are talking about the Internet, you are talking about cell phones, and you are talking about computers. This doesn't affect two-thirds of the people of the world.” Yes indeed many countries where people are struggling to earn less than $1 per day, for them globalization is just a made up word.

Let us talk about a sector which has adversely affected by globalization, Indian jute industry once considered as strength of Indian economy has completely lost its charm. Dulal Mondol a jute farmer from the state of west Bengal says “with new plastic technology coming in from foreign counties people are replacing jute bags with cheaper plastic bags thus we are out of business”. This almost true for every other sector, take the example of agriculture, Sugar production has been affected badly due cheap Australian sugar imported by merchants. Let us see how Globalization actually acts as catalyst for destruction. Exploitation is another name of Globalization in developing countries of the world, the multinational companies enters a developing country in the name of globalization and starts exploiting contries rich natural resources . Among the natural resources petroleum, coal and water are being heavily exploited by foreign companies.

Petroleum

Petroleum or crude oil is a naturally occurring flammable, organic compound consisting of hydrocarbons used to provide energy all around the world. Oil wells can be drilled up to six miles into the Earth’s surface and distilled to be used as fuel oils, gasoline, kerosene, jet fuels, and diesel fuels. The largest producers of oil are countries in the Middle East with Saudi Arabia producing nearly 25 percent of the world’s total.  Russia and the United States are also top producers.  However, the United States and the European Union consume a great deal more than they produce.

Among these top producing nations, oil is also found and exploited in developing countries.  Many of these countries, such as North African countries, have no regulations on these reserves and large corporations such as Shell and Texaco come in and completely alter their way of life.  These corporations have little respect for the people of the country or the environment as they strive for economic benefit.  This setup has been defined as the “resource curse” which refers to the negative relationship between growth and development outcomes among developing countries that depend on oil. For example-

Nigeria is the most populous country in Africa.  This western African country has discovered huge deposits of oil and has subsequently drilled and used it for economic benefit.   However, more bad than good has arisen from this newfound “black gold.”  Poverty looms, low education remains, and poor healthcare are still problems even though this country is rich in resources. Human rights continue to be a problem in this country.  Oil companies along with other multinational corporations abuse weak regulatory practices to maximize profit.  The Amnesty International and Judicial Watch in the Niger Delta region has found that human suffering in the form of environmental degradation, forcible movement, extrajudicial killings, and war crimes is severely problematic in this area .

Nearly two million barrels of oil are pumped out of the Niger River’s mangroves each day.  Ninety percent of the country’s export revenue comes from this source and the locals reap little benefit.  Oil spills are prominent averaging three per month.  These spills and ruptured pipelines destroy farmland, contaminate water, and kill aquatic life.  In October 1998, one explosion from a leaked pipeline killed 700 people.  Nigeria is one of the most economically backward, conflict ridden, and politically unstable countries in the world and the root cause is oil exploitation by multinational companies.

Mining

Every day we use highly advanced technology to look up the news or listen to our favorite songs on an mp3 player, but what we often do not realize is how these items were made. More often than we realize the materials needed to build products such as a cell phone or an iPod come from less than reliable sources. A large amount of the high grade minerals required to build your iPod most likely came from somewhere such as the Democratic Republic of Congo. The uncontrolled flow of minerals out of the DR Congo has been occurring for years now to much international protest. Millions of lives have been lost due to these resources and most average consumers have no idea that what they are holding is directly linked to this conflict.

Thousands of people had to flee the city of Goma in the Congo because of the high amount of military forces that were sent there to gain control of the especially mineral rich area. The current war in the Democratic Republic of Congo (DRC) has brought unspeakable devastation upon its people, with approximately 73,000 people dying monthly the death toll is rapidly approaching four million in three years of war. Thousands of people are displaced from their homes to make room for the militias and mining companies and they can do very little to stop it

"People have told us that they feel like they are the living dead and that their lives no longer have any value..."

-Juliette Prodhan, head of Oxfam in the Democratic Republic of Congo.

Water

It is common knowledge that water is vital to human survival, livelihoods, and most forms of economic production, yet research shows that approximately 884 million people worldwide are without adequate drinking water, and 2.6 million are without proper sanitation. This problem demands attention, but the resolution is far from simple. The need for water resources to sustain communities and operate industrial centers prompts the building of dams to control and redirect the flow of water, but the social and environmental impacts of such building is detrimental. It has been estimated that 40 to 80 million people worldwide have been left without homes or livelihoods when dams cause their lands to flood, and social tensions surrounding the rights of water usage commonly erupt in conflict. For example-

Lesotho is a land locked nation surrounded on all sides by South Africa, and situated high in the mountains earning it the name “Little Kingdom in the sky”. Home to rural mountain villagers who farm and herd animals in the harsh terrain, the people of Lesotho take pride in their ability to survive in their environment. The Orange River begins in the mountains of Lesotho, providing fresh water for the communities, and fertile soil to farm along the river banks, but drastic changes are bringing an end to this way of life. Due to the Lesotho Highlands Water Project, which will build a series of dams and tunnels blasted through the mountains, the mountain watersheds are being turned into lakes and flooding entire villages. The basis of the project is to provide water resources to Johannesburg, South Africa and economic stability to the people of Lesotho, but the environmental and social implications of such a project were unclear from the beginning. Communities are being forced from their lands, and placed in resettlement villages which are not sufficient for farming making it almost impossible for them to survive.

Resource exploitation in developing countries is an important issue in today’s globalized world. The social and environmental impacts of this exploitation are detrimental and too often irreversible, resulting in loss of livelihoods and increase in poverty, pollution and disease. We have seen through various cases such as Lesotho, Nigeria and Congo that though these projects are ultimately beneficial to multinational corporations and even large industrial centers within the developing country, they are also devastating to the poor villagers who pay the price of the projects.

Human Resource Exploitation

 As a result of globalization, the employed workforce is made up of part time, temporary, freelance, or independent contractors and is growing. Since last ten years India remains the IT and BPO hub of the world. The big multinational companies outsourcing their work to India are now a common phenomenon. The basic idea about outsourcing is that if a firm does not specialize in a certain function which it does not consider core, it will outsource the work and therefore be able to offer better cost and quality. But in the name of outsourcing there is a huge exploitation of young educated Indians are going on. Indian workers working in BPO gets as much as six times less than their US or UK counterparts. The working hours are sometimes inhuman and on top of it there is no job security. This outsourcing phenomenon has immensely benefited foreign companies but same can’t be said about Indian workers over here.

This does not mean globalization has only harmful effects, Outsourcing has certainly increased employment opportunities and lot of technological knowhow has been transferred from one country to another. But a sustainable development is needed where both globalization and nationalism should be given equal weightage.

Cultural Changes due to Globalization

My nephew who is just 12 years old is an example of new changed India, his day starts with a burger in the morning with rock music playing at the background. This is the case with most of the young people in India whom we called “corporate executives”. The culture of Burgers, pizzas, nigh outs and rock music are replacing the idli, dosa, roti, family outings and Indian songs. One of my friends says “changes are inevitable and you have to change accordingly”

Globalization can be useful as well as can be harmful; it is up to the countries and its people how they will accept it. The solution is sustainable development, people should know what to accept and what to not. After all a combination of idli and rock music is not that bad.