Stocks fly high, not the economy; African Union @ 50; ‘Beardvertising’ takes a bow

1 Stocks fly high, not the economy (Linda Yueh on BBC) If only it were economic growth. Instead, it’s stock markets that have either hit all-time highs or are very close. Just look at the dizzying heights hit by the US S&P 500 and Dow Jones, as well as the UK’s 100 share index, Germany’s DAX and Japan’s Nikkei. It is an awfully strong rise in stock prices, even beyond the levels of the early dot.com bubble of the early 2000s, which, we recall, subsequently burst. That’s why many are asking: what’s driving the boom and is it a bubble?

Attention has turned to whether cheap cash is fuelling the stock rally. Central banks like the Fed, the Bank of England, and the Bank of Japan have undertaken quantitative easing (QE). But, will the bull market benefit the economy – the aim of these QE policies? Central bankers like Fed Chairman Bernanke say that their aim is to help Main Street and not Wall Street. It may well be what they intended to do. As more than half of American households own stocks, a rising stock market could make them feel wealthier. In other words, a rising market stabilises their estimated wealth. Think of it this way, your house may be worth $10,000 less, but your stocks are worth $10,000 more. At least, that’s the theory.

Of course, the other half doesn’t own stocks. Plus, most of the stock market is owned by institutions, such as pension funds. Those who have invested in pension funds will become beneficiaries in due course. But, that’s a little remote in terms of households hoping to benefit now from a rise in the market.

Eventually, companies may invest more in the economy or pay higher dividends. They, though, may also be wary of acting on possibly inflated share prices if consumers don’t look too robust. This is perhaps why there is such a stark contrast between the stock market and the economy. At least the US and Germany have recovered to their pre-crisis levels of output; the British and Japanese economies have not.

There’s a wariness that the policies used to address the last bubble could lead to the next one. Cue those who think that the post-dot.com bubble bust was supported for too long by low interest rates, which then led to the housing bubble and the 2008 financial crisis. Now, as QE is used to address the bursting of the US housing bubble, stocks are up again. It’s unsurprising that some are worried that history may be repeating itself.

2 African Union @ 50 (Georges Nzongola-Ntalaja in The Guardian) The African Union (AU) is now 50 years old. Amid the celebrations this week, the AU – which was established as the Organisation of African Unity (OAU) in 1963 – needs to take stock of its strengths and weaknesses as an intergovernmental organisation designed to promote the pan-African agenda politically and economically. That agenda consists of a three-dimensional project of political self-determination, economic self-reliance, and solidarity in the promotion and defence of African interests nationally and internationally.

Within the global context of the cold war, the more limited goals of the OAU were (1) the total independence of Africa from colonialism and white settler rule; (2) the peaceful resolution of interstate conflicts through negotiation, mediation and conciliation; and (3) greater solidarity and economic co-operation.

Decolonisation and majority rule, particularly in the colonial-settler states of Algeria, Kenya and South Africa where racism was institutionalised, were a major achievement of the project. The culminating event was the liberation of South Africa from apartheid in 1994, ending 82 years of struggle led by the African National Congress and 31 years of support by the continent through the OAU.

The OAU also had some achievements in conflict resolution, particularly mediating in border disputes, the major area of interstate conflict in Africa. However, most of the armed conflicts since independence have been internal rather than interstate. Unfortunately, the OAU failed to exercise its right of intervention in cases of state-sponsored terrorism and heinous crimes, including ethnic cleansing and genocide. Things changed for the better in the 1990s, particularly with the adoption in 1993 in Cairo of the OAU mechanism for conflict prevention, management and resolution, which gave the organisation a role in internal conflicts. Since replacing the OAU in 2002, the AU has increased its intervention in domestic affairs.

A major problem confronting the AU is resources. In addition to governments’ lack of political will, the lack of resources for peace and security, as well as economic co-operation, is partly because countries are also members of multiple regional institutions. As an organisation that reflects the social character of the states composing it, most of which are under authoritarian rulers who cling to power through force and electoral fraud, the AU is ill-equipped to meet people’s aspirations for democracy and social progress.

3 ‘Beardvertising’ takes a bow (Johannesburg Times) A US-based advertising agency has developed a concept that sees people’s beards being used as mini billboards, according to a report. “I think it’s the next big thing,” agency Cornett Integrated Marketing Solutions’ Whit Hiler told Business Insider. “Everybody loves beards.” The scheme pays men with facial hair $5 a day to walk around with a mini ad in their beards.

The ad comes in the form of a clip-on mini billboard, much like a hair clip, the patent for which the Beardvertising website says is pending. Previously, Green Day was one of many to buy ad space on Japanese girls’ temporarily tattooed thighs and many consumers sold body space for real tattoos of now-bust dot com businesses’ URLs, so ‘Beardvertising’, as it’s called, isn’t that strange of a concept, and is seen as “half joke, half genius”.

Hiler told BI that the campaign isn’t limited to Kentucky, but will be exported “anywhere that there were epic beards willing to host these little ‘beardboards’”. While this platform does serve a promotional piece, Hiler said: “We’re getting a ton of emails from guys with epic beards that want to host beardboards and we’re actually in talks with some brands that want to be Beardvertisers. Men (or women) with beards can sign up on the website.

British boom? FTSE at 12-year high; The one percent are only half the problem; Investors have lost love for South Africa; Charging a cell phone in 20 seconds

1 British boom? FTSE at 12-year high (Nick Fletcher & Phillip Inman in The Guardian) Shares in London have reached levels last seen at the height of the dotcom boom nearly 13 years ago. At a close of 6,755 points, the FTSE 100 blue chip index matched levels from September 2000, just before the market’s fascination with loss-making technology companies such as lastminute.com came to an abrupt end and the dotcom bubble burst.

The closely watched index of the 100 biggest companies traded in London is also within sight of its all time peak of the 6,930 reached on 30 December 1999. The FTSE 100 is nonetheless lagging behind many other global markets, including the S&P 500 in the US and the Dax in Germany, which are at record levels.

Investors are betting that central bankers, including the Bank of England and US Federal Reserve, will continue their attempts to boost the global economy by printing money and keeping interest rates at historic lows. The buoyant stock market may take some of the pressure off George Osborne as he tries to persuade voters that his emphasis on public spending cuts to re-establish confidence in the economy is working.

Investors were encouraged by the Japanese government’s optimism, amid signs that Tokyo has inspired the first sustained period of solid expansion in two decades. The historically low level of interest rates has also made shares more attractive than other investments. Gold and silver, previously considered safe haven investments, have lost their lustre.

Since the global banking crisis sent markets tumbling, with the FTSE 100 falling to 3,529 in March 2009, shares have slowly been regaining lost ground, gathering momentum in recent weeks. The turning point came last summer when the head of the European Central Bank said he would do “whatever it takes” to save the euro from collapse. But some City analysts believe the recent positive run could soon come to an end, especially if the central banks turn off the money taps.

2 The one percent are only half the problem (Timothy Noah in The New York Times) Most recent discussion about economic inequality in the US has focused on the top 1 percent of the nation’s income distribution, a group whose incomes average $1 million (with a bottom threshold of about $367,000). “We are the 99 percent,” declared the Occupy protesters. But the gap between the 1 percent and the 99 percent is only half the story.

Granted, it’s an important half. Since 1979, the one-percenters have doubled their share of the nation’s collective income from about 10 percent to about 20 percent. And between 2009, when the Great Recession ended, and 2011, the one-percenters saw their average income rise by 11 percent even as the 99-percenters saw theirs fall slightly. Some recovery!

This dismal litany invites the conclusion that if we would just put a tight enough choke chain on the 1 percent, then we’d solve the problem of income inequality. But alas, that isn’t true, because it wouldn’t address the other half of the story: the rise of the educated class. Since 1979 the income gap between people with college or graduate degrees and people whose education ended in high school has grown. This skills-based gap is the inequality most Americans see in their everyday lives.

3 Investors have lost love for South Africa (David Shapiro in Johannesburg Times) Warren Buffett was diplomatic when asked recently about the prospects of investing in sub-Saharan Africa. Anxious not to offend his loyal followers from the continent, he responded that he would not exclude it, though it was not his specialty. Those who have followed Buffett’s philosophies know, inherently, he would stay clear of any region that includes words such as “indigenisation” and “Gupta” in its business glossary.

But it was hedge fund manager David Stemerman who, in an attack on African Bank, delivered a direct blow against South Africa at the recent Ira Sohn Investment Conference in New York. He said the country’s credit market was turning from boom to bust and African Bank was particularly vulnerable to the downturn.

Though his criticism was aimed at the unsecured lender, he raised concerns about the application of the 2007 National Credit Act, the unsustainable level of householder debt, the inexperience of the bank’s loan officers and the questionable practice of easing pressure on borrowers by extending the duration of the advances. Stemerman concluded that African Bank was at risk and, in trading parlance, was a big short.

Government’s apparent intervention in Anglo Platinum’s restructuring plans followed by more unrest in mining have exacerbated investor fears about future returns in the economy; a shift that has sent our currency reeling. There’s no shortcut back into the big league for South Africa. First it’s back to basics. But even before that we must recognise who and where we are. Only then can we begin preparations for our return to the premiership.

4 Charging a cell phone in 20 seconds (San Francisco Chronicle) Here’s the invention that we’ve all been waiting for: A device that instantly charges our cell phones. A gadget like this might soon be on its way thanks to a bright 18-year-old from Saratoga, California.

Eesha Khare is the mind behind a super-powerful and tiny gizmo that packs more energy into a small space, delivers a charge more quickly, and holds that charge longer than the typical battery. Khare showed off her so-called super-capacitor last week at the Intel International Science and Engineering Fair in Phoenix, Ariz. In her demonstration, she showed it powering a light-emitting diode, or LED light, but the itty-bitty device could fit inside cell phone batteries, delivering a full charge in 20-30 seconds. It takes several hours for the average cell phone to fully charge.

Khare also pointed out that the super-capacitor “can last for 10,000 charge cycles compared to batteries which are good for only 1,000 cycles.” Khare’s invention is flexible and could be used in roll-up devices and might even have applications for car batteries. The judges at the science fare were wowed by Khare’s brilliant invention and she received the Intel Foundation Young Scientist Award and $50,000. “With this money I will be able to pay for my college and also work on making scientific advancements,” Khare said.

Unemployment falls in 40 US states; China’s global ambitions; No funds for meddling; Tumblr’s Karp: High school dropout to billionaire

1 Unemployment falls in 40 US states (Christopher S Rugaber in San Francisco Chronicle) Solid hiring helped lower unemployment rates in 40 US states last month, the most since November. The declines show the job market is improving throughout most of the country. The Labour Department said unemployment rates increased in only three states: Louisiana, Tennessee and North Dakota. Rates were unchanged in seven states.

California, New York and South Carolina all reported the largest unemployment rate declines in April. Each state’s rate fell by 0.4 percentage points. The report said 30 states added jobs in April, while 18 reported fewer jobs. Nationwide, employers added 165,000 jobs in April and the unemployment rate fell to a four-year low of 7.5%. Unemployment is declining in many states because the housing industry is creating jobs again. Rates have also declined because many of the unemployed have stopped looking for work. The government counts people as unemployed only if they are actively seeking jobs.

2 China’s global ambitions (Linda Yueh on BBC) Thanks to its export success, China is the world’s largest holder of foreign exchange reserves. Those reserves are growing all the time and currently stand at a record $3.44 trillion. That’s $3,440,000,000,000 if you want all the zeros, or basically the size of the entire German economy. What’s in the reserves is a state secret, but a report in the China Securities Journal a few years ago revealed that 65% was held in dollars, 26% in euros, 5% in pounds and 3% in yen.

The Chinese are the largest holder of US government debt after the US central bank, the Federal Reserve. They also own European government debt, but perhaps not as many bonds from those troubled countries on the periphery as the eurozone governments would like to see. You might think that a trade surplus the size of China’s would be good news. But according to People’s Bank of China officials such as Deputy Governor Yi Gang, it’s actually posing problems because of the fixed exchange rate.

When a central bank accumulates reserves, it prints cash (yuan) to buy the dollars, euros, pounds and yen that it adds to its reserves. To prevent that cash from generating inflation (imagine if China added $3.4tn of cash to its $8tn economy), the central bank “sterilises” its actions by withdrawing the equivalent amount of cash from the economy. It does this by paying interest on money that commercial banks deposit back at the central bank, so encouraging them to leave their cash there.

Compounding the problem is the worry that the central bank may not be earning a great return on those reserves, as the yields (or interest rates) on US and European government bonds are low. So, instead, China is using its reserves to finance overseas investment. China wants to buy real assets – like ports, utilities, natural resources, technology and financial companies.

Chances are, China won’t be running the large trade surpluses of the past. Last year, the surplus fell to less than 3% of GDP from the over 10% reached before the 2008 global financial crisis. What is clear that we will see Chinese companies increasingly on the global stage. Their success will matter not only for the companies, but also for the country’s continuing growth.

3 No funds for meddling (Johannesburg Times) If South Africa is expected to meddle in the affairs and military adventures of other countries under the auspices of organisations such as the African Union, United Nations and so on, such activities should be funded by these organisations, not the South African taxpayer.

4 Tumblr’s Karp: High school dropout to billionaire (Megan Levy in Sydney Morning Herald) Five years ago, tech prodigy David Karp was determined that the business he founded in his mother’s small New York apartment would not be absorbed by a multinational firm. “We would really rather not be gobbled up by a big media company,” then 21-year-old Karp, the creator of the blogging platform Tumblr, said in an interview. But what if someone was throwing $US1.1 billion cash at you?

Karp, 26, now looks set to become the latest tech billionaire with reports that Yahoo’s board has approved a deal to purchase Tumblr for $1.1 billion in cash. It’s a mind-boggling amount of money for anyone, let alone a once socially awkward teenager who dropped out of high school at the age of 15. Remarkably it was Karp’s mother, teacher Barbara Ackerman, who suggested her son drop out of high school at the age of 15 so he could be home-schooled and continue an internship at an animation production company, Frederator Studios.

Karp’s mother recognised that, while her son was not particularly engaged with his classes or his fellow students, he seemed to thrive at the internship where he could talk easily with the company’s coders and engineers. Karp’s mother said she could feel the sense of relief through her hand on her son’s shoulder when she floated the idea to him.

Soon his career was taking off. Karp said that initially he would lie about his age when dealing with clients. He then became fascinated by a new short-form of blogging called a “tumblelog”. He said he “kept waiting” for one of the established blog platform players to set up a platform for tumblelogging and, when that didn’t happen, he did it himself. Karp founded Tumblr in 2007 at age 21 from the bedroom of his mother’s apartment in New York.

Tumblr lets its users curate pictures, videos and text in one place online. The site gained 75,000 users in the first fortnight. Tumblr now says it has more than 108 million blogs, 50 billion postings in 12 languages and 175 employees. The website ranking site Alexa lists Tumblr as number 32 in terms of global popularity, and this year Karp made the Forbes 30 Under 30 list in the media category. But despite his success, Karp prefers not to live an opulent life.

US economy losing steam; Mulling capitalism’s future; Dell profit falls 79%; India’s agrarian crisis; ‘Muslim’ v/s ‘Islamic’

1 US economy losing steam (Jason Lange in Khaleej Times) The number of Americans filing new claims for unemployment benefits climbed last week at the fastest pace in six months, the Labour Department said. Initial claims for state unemployment benefits jumped by 32,000 to 360,000. That was the biggest jump since November and confounded analysts’ expectations for a more modest increase.

The US economy has shown signs that growth slowed late in the first quarter and in April as Washington’s push to trim the budget deficit weighed on consumers and businesses. The federal government hiked taxes in January and initiated sweeping budget cuts in March. Data on jobless claims has been a relative bright spot in the US labour market, and analysts will be cautious over reading too deeply into one week of dour data, which showed claims at their highest since late March.

Housing has also been an economic bright spot, but a separate report showed ground-breaking for new US homes plummeted more than expected in April. The Commerce Department said starts at building sites for homes fell 16.5% last month to a 853,000-unit annual rate. Still, permits to build new homes increased, a reassuring reminder that the housing sector could still contribute to the economic recovery.

A sharp drop in gasoline costs led US consumer prices to tumble in April by the most in over four years, while a gauge of underlying inflation was also weak. The Labour Department said its Consumer Price Index slipped 0.4%, the biggest decline since December 2008 when America was suffering some of the darkest days of its financial crisis. Much of April’s decline in prices was fuelled by an 8.1% dive in gasoline costs, the biggest decline since December 2008.

2 Mulling capitalism’s future (Chrystia Freeland in The New York Times) One of the most urgent questions in economics today is the connection between inequality and growth. There are two main and contradictory ideas about how the relationship might work. One is that inequality is the price of robust economic growth. If the private sector is thriving, the most successful capitalists will be getting very rich. The other view is that rising inequality is not a symptom of a fast growing economy or an incentive that will help create one. Instead, too much income inequality crushes economic growth.

There are different arguments for why that might happen. One is that high income inequality creates an unstable system that is vulnerable to costly booms and busts. Another is that when too much of the income goes to the very top and not enough goes to the middle, spending slumps, putting a brake on growth.

David Howell, a professor of economics at The New School in New York, has written a draft paper that investigates the first argument. Mr. Howell argues that the US and Britain have acted over the past three decades on what he calls the laissez-faire theory, that the equation of rising inequality and increasing gross domestic product is correct. As he puts it, “the laissez-faire case for high inequality is grounded in the belief that growth in output and employment depends mainly on strong incentives to work and invest.”

He tested that view by comparing the US and Britain to their peers. He asked whether “compared to other rich countries, US income inequality has paid off in relatively high growth.” His answer: not particularly. He finds that “there is no simple correlation between our measures of growth and income inequality.” Lars Osberg, an economist at Dalhousie University in Nova Scotia, argues that a growing chasm between those at the very top and everyone else imperils the overall economy. His worry is financial instability.

 “Go back to the 1920s or the 1870s and economists were worried about the stability of the capitalist system,” Mr. Osberg said. “One of the things the 1930s experience teaches us is there are some catastrophic outcomes which can happen.”  The investing class and the academic world are focused on those dangers. “Can capitalism survive?” is one of the trendiest conference topics. So far, at the ballot box and on the street, this question has not been as salient. That does not mean it will not be in the future, and in ways we cannot predict.

3 Dell profit falls 79% (BBC) Dell has reported a 79% slide in net profit, underlining a fall in personal computers sales as more consumers shift to smartphones and tablets. The PC maker’s net profit fell to $130m in the three months to 3 May, on revenue down 2% to $14bn. Dell is in the middle of a dispute between founder Michael Dell and two of its biggest shareholders. Mr Dell wants to take the company private, but some investors oppose the plan.

In its quarterly results, Dell said that revenue from new technologies, services and software, rose 12% to $5.5bn. That was in contrast to PC sales, which fell 9%. The company did not issue a profit guidance for the second quarter due to the ongoing dispute.

4 India’s agrarian crisis (Neeta Lal in Khaleej Times) Farmers — once regarded as the heart and soul of India’s social and economic fabric — are a dwindling tribe today. According to a recent census by the Registrar General of India, the number of farmers in India has plummeted by nine million during the decade 2001-2011, and hovers at 118.7 million today.

Although agriculture constitutes only 21% of India’s GDP, its importance in the country’s economic, social, and political arenas goes well beyond this indicator. The rural areas still host over 70% of India’s 1.1 billion people, a majority of whom are poor. Most of these rural poor depend on rain-fed agriculture and fragile forests for their livelihoods. Sustained agricultural growth in the 1990s whittled down rural poverty to 26.3% by 1999/2000. Since then, however, the deceleration in agricultural growth has been worrisome. India’s rice yields are one-third of China’s and about half of those in Vietnam and Indonesia. With the exception of sugarcane, potato and tea, the same is true for most

Who’s to blame? The ruling political dispensation has been focusing on reducing poverty by raising agricultural productivity. However, given the current scenario, agricultural economists suggest that India needs bold policy initiatives to shift gears from the existing subsidy-based model that’s no longer tenable, to a durable architecture for a highly productive, internationally competitive and diversified agricultural sector.

Raju Das, a developmental studies professor at York University in Canada, diagnoses that farmer suicides represent part of a “broader political-economic problem.” Even now, seven decades after the British left, 70% of India’s farmland depends on the monsoon. It seems the Indian government’s priority is now clearly the country’s new urban high-tech based economy. India’s transformation from a rural economy to an urban-based manufacturing and technology behemoth, has resulted in this paradigm shift. So unless the State begins addressing pressing problems like irrigation, rural credit, and regulation of the business practices of multinational corporations, among other things, the Indian farmers’ crisis will continue.

5 ‘Muslim’ v/s ‘Islamic’ (Jan-e-Alam Khaki in Dawn) In contemporary times, particularly in the Indian subcontinent, there has developed a tendency to show all caliphs and sultans, governors and generals as ‘Islamic’ heroes. This leads us to ask: what exactly is the difference between calling something/somebody Islamic or Muslim? And how does this make a difference?

Islamic denotes something/ somebody as mandated by Islam or having Islamic credentials to reflect Islamic character. The word Muslim, on the other hand, denotes an individual who happens to be a Muslim. It does not show what that individual did that was Islamic.

What this does is that it allows historians and scientists to be relatively free to discuss, examine and judge that person’s acts of commission and omission. When a strong epithet of Islamic is added to a concept or a person, it immediately exalts the entity to a ‘sacred’ status and makes it difficult if not impossible to examine it/him/her critically, using or applying the conventions of historical analysis/critical discourse analysis.

Interestingly enough, now this epithet (Islamic) is being used with so many personalities or concepts that practically anything done by a Muslim ‘hero’ or a ruler becomes sanctified and he/she becomes infallible. This appears quite contrary to the historical epochs that we call formative. In sum, writers should use the terms ‘Islamic’ or ‘Muslim’ discerningly which can prevent standardisation of everything Muslims do or don’t do in a particular society at a particular time and in a particular context.

Longest downturn for Eurozone; Rich-poor divide accelerating; Are you schooled or are you educated?; Angelina’s jolly good act; Print your own solar panel

1 Longest downturn for Eurozone (Graeme Wearden in The Guardian) The eurozone has slumped into its longest recession ever, after economic activity across the region fell for the sixth quarter in a row. Economic output across the single currency area fell by 0.2% in the first three months of 2013. France, Spain, Italy and the Netherlands all saw their economies shrink as the economic crisis in the eurozone continued to hit its largest economies.

Eurostat’s figures showed that the eurozone economy has contracted by 1% over the last year, putting further pressure on leaders as unemployment climbs to new record highs. The 0.2% contraction in the first quarter was an improvement on the 0.6% drop recorded between October and December, but analysts warned that the eurozone’s economic outlook is darkening.

“What seems incontrovertible, on this evidence, is that the member-states of the euro zone are on the wrong track,” commented Stephen Lewis, chief economist at Monument Securities. “The costs of the zone’s one-size-fits-all strategy are becoming brutally apparent.”

“The bottom line is that both the German and French economies, which together account for half of the eurozone’s output, are in the doldrums,” said Nick Spiro of Spiro Sovereign Strategy. “Add in the persistent recession in the Netherlands, which accounts for a further 6.5% of eurozone GDP, and the core and semi-core of the eurozone are in significantly worse shape than a year ago.”

2 Rich-poor divide accelerating (BBC) The gap between rich and poor widened more in the three years to 2010 than in the previous 12 years, the OECD group of industrialised nations has said. It says the richest 10% of society in the 33 OECD countries received 9.5 times that of the poorest in terms of income, up from nine times in 2007. Those with the biggest gaps included the US, Turkey, Mexico and Chile.

The OECD says that if governments do not stop cutting back on welfare support this gap will grow wider. The Paris-based group is generally in favour of free-market policies, but has recently become more vocal in support of more generous social provision to soften the impact of the economic downturn of the past few years.

The OECD’s secretary general, Angel Gurria, said: “These worrying findings underline the need to protect the most vulnerable in society, especially as governments pursue the necessary task of bringing public spending under control.” Countries where the gap was least pronounced were mainly in the north of Europe, with Iceland, Norway, Denmark and Slovenia the most egalitarian societies.

3 Are you schooled or are you educated? (Jonathan Jansen in Johannesburg Times) I have bad news for you. While most of you have been schooled, few of you have been educated. There is a difference.  Those of you who have had schooling followed the rules of the school, attended your classes, did your homework, wrote the tests, passed, and received a certificate of some kind.

You were, in a sense, institutionalised. But you can be schooled and still be a barbarian. You can frame and hang your certificates against a wall and still be uneducated. You can attend many years of formal schooling and still be reckless. I see this all the time. School, in this sense, is therefore not primary school or high school; it is all forms of institutionalisation, including college and university, in which you are schooled to behave.

These mechanical routines that lock students in classrooms and compress information into their heads in limited periods have morphed into an industry where past exam papers are rehearsed, class notes are memorised and test questions “scoped” to ensure as many of those in attendance has possible achieve some passing grade.

An educated man or woman is someone who learns, first of all, to doubt. An educated person, as opposed to one merely schooled, is guided by values such as humility. It is this deep understanding that you are not better than the person you despise or curse, and that very often you are subject to the same weaknesses (such as prejudice) as the one who offends you. When education teaches and nurtures a humble spirit it prepares the ground for reconciliation; it creates, further, a foundation for leadership that acknowledges mutual vulnerability and therefore prepares leaders who are capable of solving complex human problems.

To be educated is to have the courage to act on principle and not on the basis of ethnic or political or religious partisanship.  Yes, friends will be lost, tenders forfeited and sometimes even family bonds severed. Yet an educated person rises above the passions of the moment. What should matter really is how many young people obtain distinctions in life through the capacity for care, courage, commitment and contrition.

4 Angelina’s jolly good act (Khaleej Times) If there’s one disease that truly haunts people — that generates an acute sense of helplessness — it’s cancer. Time and again, a person’s genetic make-up has been scientifically shown to play a big role in triggering abnormal cell growth.  Still, many people continue to remain in denial, choosing to not think about the worst-possible outcome, till they actually have to face it. And this is highly prevalent attitude that Hollywood actress-director Angelina Jolie has tried to discourage women from having.

Jolie, in an op-ed in New York Times, revealed that she got a double mastectomy done to reduce her chances of getting breast cancer. Jolie’s mother, actress-producer Marcia Bertrand, died at the age of 56 after battling ovarian cancer for a decade. And when Jolie found out that she carried the ‘faulty’ gene that made her 87 and 50% vulnerable to getting breast and ovarian cancer respectively, she decided to go for a rather drastic step: double mastectomy. According to the Academy Award winner, she made this decision — which, according to her, did not adversely impact her femininity — to ensure that her six children did not lose her to breast cancer.

Jolie’s decision to share her story has been vociferously lauded by cancer organisations and breast cancer survivors worldwide. Her article was not just a testament to the fact that celebrities with fame and wealth are also mere mortals, it will also encourage women to take such this radical preventive measure. One in eight women in the world suffers from breast cancer, but for those at a high risk of developing the disease, preventive mastectomy can potentially save lives.

5 Print your own solar panel (Miles Godfrey in Sydney Morning Herald) Australian scientists have found a way to print large but extremely lightweight and flexible solar panels like money. World-leading scientists at the CSIRO said the A3-sized panels, which are created by laying a liquid photovoltaic ink onto thin, flexible plastic could soon mean everyone has the ability to print their own solar panels at home. “It would definitely be feasible to do that,” said CSIRO materials scientist Dr Scott Watkins.

Experts from the University of Wollongong and Melbourne’s St Vincent’s Hospital are already testing the idea of printing human body parts, such as replacement organs and tissues. CSIRO’s solar panels, which have been in development for five years with a team of experts at Monash and Melbourne universities, are attracting interest from big companies that see a wide range of applications.

Near-term uses include putting the panels, similar in feel to a glossy magazine page, onto laptops or mobile phones – offering an extra hour of power once the inbuilt battery dies. They could also be printed on to skyscraper windows or roofs. The ability to print solar panels is not new in itself – but what is new is the ability to make them as large and powerful as the Australian version.

6 Conditions for India’s Olympic dreams (Romit Guha in The Wall Street Journal) The International Olympic Committee said its talks with a sports delegation from India this week were “successful,” but the country’s Olympic Association must change its constitution and hold fresh elections if its suspension from the Olympic body is to be revoked. The IOC suspended the Indian Olympic Association on Dec. 4 for violating the Olympic Charter, which stipulates that its members must not be older than 70 and tenures should be time-bound; two stipulations that India has ignored. V.K. Malhotra, for example, who headed the IOA until December, is 82 years old. He has also run the country’s archery governing body for more than 30 years.

The IOC also claimed government interference in the IOA’s December elections. It refused to recognize the elections, which India pressed ahead with despite warnings by the IOC’s ethics panel against the candidature of Lalit Bhanot, who has been accused of graft in the organizing of the Commonwealth Games. Mr. Bhanot, who is out on bail and has denied any wrongdoing, was elected secretary general of the IOA.

The suspension means that Indian athletes cannot compete under the national flag at Olympic events and aren’t eligible for IOC funding. The IOC’s focus on improving administration and ethics is likely to be welcomed by India’s sporting community, which has long complained the country’s sports bodies are mismanaged, mainly as they are helmed by politicians rather than sportspeople. India won six medals–none gold–at the London Olympics, its biggest ever haul but a poor return for a country of 1.2 billion people.

Shale gas shifts global power balance; Economic change and male masculinity crisis; How austerity kills; India unveils cheap diarrhoea vaccine; Dubai airport is world’s busiest

1 Shale gas shifts global power balance (BBC) A steeper-than-expected rise in US shale oil reserves is about to change the global balance of power between new and existing producers, a report says. Over the next five years, the US will account for a third of new oil supplies, according to the International Energy Agency. The US will change from the world’s leading importer of oil to a net exporter.

“North America has set off a supply shock that is sending ripples throughout the world,” said IEA executive director Maria van der Hoeven. The IEA said it expected the US to overtake Russia as the world’s biggest gas producer by 2015 and to become “all but self-sufficient” in its energy needs by about 2035.

US production is set to grow by 3.9 million barrels of oil per day (bpd) from 2012 to 2018, accounting for some two-thirds of the predicted growth in traditional non-Opec production, according to the IEA. The sharp rise in US oil production is largely thanks to shale oil, a product many have hailed as the saviour of the US energy market. Fracking, the process of blasting water at high pressure into shale rock to release oil (or gas) held within it, has become widespread in the US.

But critics of shale oil point to environmental concerns such as high water use and possible water contamination, the release of methane and, to a lesser extent, earth tremors caused by drilling. The process has been banned in France, while the UK recently lifted a moratorium on drilling for shale gas.

2 Economic change and masculinity crisis (Rajeev Syal in The Guardian) Britain is facing a “crisis of masculinity”, with rapid economic change warping male identity and encouraging machismo and misogyny, Labour MP Diane Abbott will claim on Thursday. The shadow public health minister will say in her speech that unemployment and the economic downturn risks creating a generation of disaffected young men, fuelling homophobia, machismo and misogyny.

She will also say men are failing to discuss the problems they face. “It’s all become a bit like the film Fight Club – the first rule of being a man in modern Britain is that you’re not allowed to talk about it.” The government must put the aim of full employment at its heart if these problems are to be solved, she believes.

Speaking to the thinktank Demos, Abbott will argue that boys are becoming increasingly isolated from their parents and friends, while grown men are working longer hours, dying of preventable cancers, and taking their own lives. “This generation no longer asks itself what it means to be a man,” she will say.

Consumerism has replaced earning, providing and belonging for many men, according to the MP, giving rise to a culture of “hypermasculinity” – a culture that exaggerates what are perceived as manly qualities in the face of perceived threats. Pornography has also had a damaging affect upon men, Abbott claims, which has added to the growth of a “Viagra and Jack Daniels” culture.

Far from yesterday’s role models of soldier, miners and farmers, male youths, says Abbott, are part of a “transit generation” left working in services industries they are uncomfortable with, or not working at all. “Look at many of our young men graduating from university this year,” her speech says. “Faced with mass unemployment and often unable to fly the nest they can find themselves locked into a transitional phase at home, or find themselves voluntarily creating an extended adolescence, sometimes resentful of family life.”

3 How austerity kills (David Stuckler & Sanjay Basu in The New York Times) Countries that slashed health and social protection budgets, like Greece, Italy and Spain, have seen starkly worse health outcomes than nations like Germany, Iceland and Sweden, which maintained their social safety nets and opted for stimulus over austerity. (Germany preaches the virtues of austerity — for others.)

As scholars of public health and political economy, we have watched aghast as politicians endlessly debate debts and deficits with little regard for the human costs of their decisions. Over the past decade, we mined huge data sets from across the globe to understand how economic shocks — from the Great Depression to the end of the Soviet Union to the Asian financial crisis to the Great Recession — affect our health. What we’ve found is that people do not inevitably get sick or die because the economy has faltered. Fiscal policy, it turns out, can be a matter of life or death.

At one extreme is Greece, which is in the middle of a public health disaster. The national health budget has been cut by 40% since 2008, partly to meet deficit-reduction targets set by the so-called troika —  the International Monetary Fund, the European Commission and the European Central Bank — as part of a 2010 austerity package. Some 35,000 doctors, nurses and other health workers have lost their jobs. Hospital admissions have soared after Greeks avoided getting routine and preventive treatment because of long wait times and rising drug costs. Infant mortality rose by 40%.

In contrast, instead of bailing out the banks and slashing budgets, as the I.M.F. demanded, Iceland’s politicians took a radical step: they put austerity to a vote. In two referendums, in 2010 and 2011, Icelanders voted overwhelmingly to pay off foreign creditors gradually, rather than all at once through austerity. Iceland’s economy has largely recovered, while Greece’s teeters on collapse. No one lost health care coverage or access to medication, even as the price of imported drugs rose. There was no significant increase in suicide. Last year, the first U.N. World Happiness Report ranked Iceland as one of the world’s happiest nations.

Skeptics will point to structural differences between Greece and Iceland. Greece’s membership in the euro zone made currency devaluation impossible, and it had less political room to reject I.M.F. calls for austerity. But the contrast supports our thesis that an economic crisis does not necessarily have to involve a public health crisis.

4 India unveils cheap diarrhoea vaccine (BBC) Scientists in India have unveiled a new low-cost vaccine against a deadly virus that kills about half a million children around the world each year.

Rotavirus causes dehydration and severe diarrhoea and spreads through contaminated hands and surfaces and is rampant in Asia and Africa. India says clinical trials show the new vaccine, Rotavac, can save the lives of thousands of children annually. An Indian manufacturer said the vaccine would cost 54 rupees ($1). International pharmaceutical companies GlaxoSmithKline and Merck produce similar vaccines but each dose costs around 1,000 rupees ($18).

“This is an important scientific breakthrough against rotavirus infections, the most severe and lethal cause of childhood diarrhoea, responsible for approximately 100,000 deaths of small children in India each year,” India’s Department of Biotechnology official K Vijay Raghavan said.  Rotavac will be made by Hyderabad-based Bharat Biotech. The company said it could mass-produce tens of millions of doses after clearance is given, expected in eight or nine months.

5 Dubai airport is world’s busiest (Abdul Basit in Khaleej Times) Dubai International Airport has won the crown of being the world’s busiest airport for international traffic for the first time. Previously, London Heathrow was enjoying that title. Dubai was on top when the latest figures published by Airports Council International were released last month. ACI released January figures that showed Dubai recorded 5.53 million passengers, while London Heathrow witnessed 4.86 million during the same period.

Dubai International and London Heathrow have published their first-quarter results on their respective websites, showing that Dubai is leading with 16.5 million passengers while Heathrow reported 16 million for the same period. On a longer term level the fact remains that Dubai International is on track not just to surpass the 65-million passenger target set for 2013, but it will also displace Heathrow as the world’s most busiest international airport with full-year results.

6 ‘Life’s like that cartoon’ in Khaleej Times

http://www.khaleejtimes.com/cartoongall.asp?next=0&file=data/photogallery/cartoon/cartoon.xml&section=cartoon

EU is the new sick man of Europe; GCC foreign assets to hit $2.5 trn; Discriminating the rich!; Why cheap gold won’t cut India’s deficit

1 EU is the new sick man of Europe (Graeme Wearden in The Guardian) Public support for the European project has fallen and distrust between countries is growing, according to a new survey that shows the damage caused by the region’s debt crisis over the last few years. The well-respected Washington-based Pew Research Center warned that support for the EU has slid over the last 12 months, from 60% in 2012 to just 45% this year.

In a report titled “The New Sick Man of Europe: the European Union”, Pew showed that backing for European integration tumbling in France. The people of Europe are increasingly gloomy about economic conditions, disillusioned about their leaders, and losing faith in the whole idea of European Unity, the poll found.

2 GCC foreign assets to hit $2.5 trn (Issac John in Khaleej Times) Economic growth in the GCC is poised to moderate, but net foreign assets of the six-member bloc are projected to exceed $2.5 trillion by the end of 2013, the Institute of International Finance, IIF said. The IIF, the leading global association of financial services firms with more than 470 member institutions, said after registering an average growth of 5.8% in 2012, GCC growth is projected to moderate to 3.8% in 2013 due to flattening oil production.

With a projected decline in crude output, the consolidated external current account surplus for the GCC is likely to decline from a peak of $389 billion in 2012 to $334 billion in 2013, “but still leading to a sizeable accumulation of foreign assets, which could rise to around $2.5 trillion by year-end”, the IIF said in its GCC report. The growth of the non-hydrocarbon sector, more representative of economic activity, is forecast to stay robust at around five per cent this year. The IIF expects average oil prices to be $108 per barrel this year.

The report presents forecasts of key macroeconomic indicators based on two oil scenarios: a baseline scenario with oil prices stable at $108 a barrel through 2020; and an alternative scenario which assumes a drop in oil prices to $85 per barrel starting in 2014 and lasting through 2020.

3 Discriminating the rich! (Neeta Lal in Khaleej Times) Should the state provide security to its rich citizens who are facing a threat perception? This raging debate flared anew in the Indian public space following the government’s offer to provide top level security to billionaire Mukesh Ambani after a terror group threatened to blow up his one-billion dollar Mumbai home ‘Antilia’. Presuming that Ambani’s security would be at the taxpayers’ expense, vociferous public protests went up. Social media sites seethed with rage while activists’ screamed outrage.

The possibility that the head honcho of the Reliance conglomerate — whose personal worth is valued by Forbes magazine at $21.5 billion — may enjoy free security cover by a resource-crunched state was anathema to many. Who can blame them? India is swamped by so many other dire problems that need looking into: a whopping 450 million poor people, nearly 50% of the country’s households, which don’t have access to a toilet, rampant diseases, child malnutrition and such like. 

Such was the vehemence of protests that Home Minister Sushil Kumar Shinde had to swiftly clarify that the cost of Ambani’s protection (about Rs 1.5 million per month) will not be borne by the government but by the businessman himself. Ergo, the tycoon is now swathed in “Z Category” security, becoming India’s first private individual to be accorded this level of protection.

However, despite Ambani footing the bill of the state-proffered security, there’s disenchantment still amongst a sizeable constituency. Their contention is basically this: How can the country’s security machinery — stretched to breaking point and hardly battle-worthy (evident from India’s rape epidemic!) — be deployed for the safety of someone who can easily get the best protection money can buy?

Ambani’s company already provides protection for him. But naturally, the company can’t claim to possess the government’s exhaustive wherewithal to tackle a full-blown terror attack. As for the protesters, by all means scrutinise the elite’s businessman’s commercial dealings or his wrongdoings. But discrimination on the grounds that an individual is well-off, and is therefore not worthy of state protection even in the event of a terror threat, is wrong. Why crucify the poor man for his bank balance?

4 Why cheap gold won’t cut India’s deficit (Biman Mukherji & Debiprasad Nayak in The Wall Street Journal) The slump in gold prices in mid-April sparked hopes that India would be able to narrow its current account deficit, as less would be spent on buying gold. But those hopes appear misdirected as the fall in prices to a two-year low prompted a buying spree. “Whatever advantage we would have had due to lower price has been negated by higher demand,” said Madan Sabnavis, chief economist at CARE Ratings.

A love of gold has been one of the main contributors to India’s current account deficit, which widened to a record 6.7% of gross domestic product in the October-December quarter, the latest period for which GDP data are available.

The current account deficit is seen by analysts as the main drag on the Indian rupee. In April, the deficit grew more than 70% from March, fueled by a buying spree in gold after prices slumped just ahead of the peak wedding season, which runs to June. India has raised the import tax on gold to 6% from 2% over the last year-and-a-half in the hope of reducing gold purchases. But that hasn’t stopped the buying.

The Reserve Bank of India Monday announced a policy measure that would effectively make it tougher to import gold, saying only jewelry exporters would be allowed to use a credit facility for importing gold consignments. Traders said measures to reduce gold imports would probably drive up smuggling, which has already been growing in the last two years. “You see the Indian gold consumer is like water. Do what you will, but he will find his way around,” said Girish Choksi, a bullion dealer based in the Indian city of Ahmedabad.