1 The Khaleej Times on Russia rotting in some ways and getting wealthy otherwise. The winner of Sunday’s legislative election in Russia was a foregone conclusion: United Russia, organised by Vladimir Putin. Likewise, there is no doubt that Putin himself will win the presidential election due in March 2012. But the public enthusiasm that ratified Putin’s rule for a decade has vanished. Unlike Europe, beset by a sovereign-debt crisis, and the United States, whose leaders are wrangling over how to stem the deficit, Russia may look like an oasis of stability and continuity. But that continuity is more reminiscent of the zastoi, or stagnation, of the Brezhnev era.
Given Russia’s economic fundamentals, Putin’s diminished popularity might appear surprising. The International Monetary Fund’s forecast of four per cent growth in 2011 and subsequent years puts Russia well behind China and India, but far ahead of average growth rates in the rich G-7 countries. Moreover, Russia’s budget will be balanced as long as oil prices remain above $110 per barrel. But Russia remains essentially a “rentier state” – that is, a state whose primary source of revenue is rent – in this case, oil and gas – rather than taxation, which thus keeps demands for political representation at bay. Instead, the state is the target of political entrepreneurs who strive to capture it in order to capture the rents that it controls. Russia has most of the usual features of rentier states: autocracy, weak political and judicial institutions, arbitrary governance, lack of the rule of law, little transparency, restraints on freedom of expression, widespread corruption, cronyism, and nepotism. Also common to rentier states are short investment horizons, vulnerability to commodity-price volatility – euphoria when they surge, crisis when they collapse – and an underdeveloped and uncompetitive manufacturing sector. Yet there are hints of hope.
Russia no longer lags behind the developed world in Internet use, which has provided space for unregulated speech, allowing users to circumvent the official – and overwhelmingly pro-Putin – news media. When Russia marks the 20th anniversary of the collapse of the Soviet Union this Christmas, it will have much to celebrate. Unfortunately, what hasn’t changed will give it much to rue.
2 The Khaleej Times wondering why not have a no-work-no-pay system for Indian MPs. As the Indian Parliament witnessed one gridlock after another over Foreign Direct Investment in retail during its Winter Session, a chant of “no-work-no-pay”—targeted at the legislators — is resonating the air. Indeed if all that the Members of Parliament are going to do, say the advocates of the radical measure, is bawl on the floor of the House and create mayhem with their obstructionist ways, then why should they draw salaries? And why should the tax payer — who they are supposed to be representing in Parliament – share this burden? The bedlam during this Winter Session cost the national exchequer a daily loss of over Rs 20 million. Apparently, Indian MPs now pocket 68 times the national average salary. But the conditions of their service have not changed. In the US, for example, Congress members cannot earn more than 15 per cent from outside of their Congressional salary. In India, the average assets of 304 MPs — who contested in 2004 and then re-contested in 2009 – ratcheted up 300 per cent!
3 The Johannesburg Times on a ‘fat tax’ that could fund health care. People who eat fatty food and drink sugary soft drinks could be taxed for their unhealthy habits. A fat tax, or “innovative financing mechanism” idea was proposed by Dr Robert Fryatt, an economic adviser to the minister of health. Fryatt, who was a strategic planner at the World Health Organisation, said the fat tax concept was “getting clear support” from many countries around the world. Other ways of raising funds to implement the universal healthcare programme were to further increase alcohol and cigarette tax.
4 Straits Times on a likely 30% crash in Singapore property prices next year. Property prices could fall by as much as 30% next year as a result of the government’s latest move to cool the market, analysts have predicted. This would be a chilling replay of what happened during the global financial crisis in 2008 and 2009, when home prices slid 25% over 12 months. These sobering warnings arrived on Thursday amid a slew of analyst reports taking stock of the surprise measures to cool Singapore’s property market announced on Wednesday night. The curbs include an unprecedented extra stamp duty of 10% on any foreigner buying a residential property in the country.
5 Andrew Roberts arguing in The Wall Street Journal that British legacy has kept India a jewel of the world. Before the Empire quit, it gave India a great gift in the spring of 1944—it repelled the Japanese at India’s gates at the battles of Kohima and Imphal. The victory was a tribute to the grit and determination of the Indian fighting men, who were officered in great part by Britons and led by General Sir William Slim. Had the Japanese broken through into the Indian plains between March and July 1944, the ravages they were then committing across the rest of their so-called “Greater Asia Co-Prosperity Sphere” would undoubtedly have been the fate of India too.
The first and most obvious survivor of the British legacy is that which lured the Elizabethan merchant adventurers of the Honourable East India Company to India in the early 17th century: trade. In the 2010-11 fiscal year, the United Kingdom was India’s sixth largest trading partner, accounting for $7.14 billion of India’s exports and $5.39 billion of its imports, which is set to rise. Today, Indian students spend $465 million in tuition fees at British colleges and universities each year, while British high-street retailers such as Marks and Spencer and Debenhams have done very well in India.
Oxford economist Deepak Lal, the nephew of a former mayor of Delhi and Nehru cabinet minister who was imprisoned by the British says, “Despite Marxist and nationalist cant, the British Empire delivered astonishing growth rates to India, which were not seen elsewhere in the world, and would not have been seen in India had it remained under the Mughals. The Empire required a corruption-free administration to service it, which is what Britain delivered in the shape of the Indian Civil Service. Britain’s other great legacy to India is the English tongue, which is spoken by around 18% of Indians and serves as the global language of business, the Internet and advanced technology. The same can be said of the Empire’s construction of railways and other massive infrastructure projects in India. In the great race to prosperity—and thus global hegemony—presently taking place between India and China, anyone interested in the survival of a liberal-minded and tolerant civilization must be rooting for the victory of India, infused with the best traditions of Westminster-style representative institutions, over a sabre-rattling, resentful and totalitarian China. The shade of the King-Emperor is cheering India on.
6 The Wall Street Journal on the brick-and-moral dilemma in the latest battle between Amazon and retailers. Brick-and-mortar retailers are asking consumers to “buy it where you try it” after Amazon disclosed it will be encouraging consumers to treat stores as showrooms through the use of a one-day promotion on Saturday. Amazon’s promotion will give shoppers up to $5 off on most purchases made using its price-check application. Large and small retailers alike often consider Amazon one of their toughest competitors, but this time around they say the company’s initiative is a direct attack. “It’s wrong to try something in the store and then buy it online,” said Lesley Tweedie, who owns a bike shop with her husband in Chicago and is hoping that the mantra “buy it where you try it” takes off.
7 Arvind Singhal, chairman and founder of Technopak Advisors in Business Standard, that e-commerce, and not FDI, will be the major cause of disruption for traditional retail in India.
8 Business Line report that Crisil has cut India’s 2011-12 GDP growth forecast to 7%.
9 Bloomberg report in Business Line that global companies face a $12.3 trillion equity gap by 2020 as investors avoid stocks. Global companies’ demand for equity capital may outstrip supply by about $12.3 trillion in 2020 as investors avoid stocks, spurring firms to take on more debt and leaving them vulnerable during recessions, McKinsey & Co. said. Investors may cut their equity holdings to 22% of total investments by 2020 from 28% now. Companies in 18 emerging and developed nations examined by McKinsey will need to raise $37.4 trillion of additional capital to support growth, exceeding the $25.1 trillion of new money invested into stocks, the firm said. More than 60% of investors in emerging Asian economies said they prefer to keep savings in deposits rather than in mutual funds or equities, according to the study.
12 BS Raghavan in Business Line about what Indian politicians can learn from David Cameron. All Indian politicians, to a person, gave vent to their panic when someone, angry at the alleged ‘corruption’ of the Agriculture Minister, Mr Sharad Pawar, and his neglect to control food prices, gave him a slap at a public function. The President, the Vice-President, the Prime Minister, all leading lights of the government and the Opposition, and various political parties, lost no time in expressing their shock and outrage, and insistently demanding an increase in the protective security cover for politicians.
Contrast this with the phlegmatic manner British Prime Minister, David Cameron, and the British Parliament and the public, viewed a really dangerous incident last August when the Taliban came very close to downing the Chinook helicopter in which he was flying on a visit to Afghanistan. Everyone in Britain took it in his stride. But for a routine question in Parliament, the political class went about its usual business as if nothing happened. What India’s politicos need particularly to take to heart is the way Mr Cameron dusted it off. He promptly dismissed any suggestion of increasing the level of his security and even said that he would carry on with his preferred habit of walking between his official residence at 10 Downing Street to the House of Commons. What must come as more shocking to our puffed up politicos is that despite his scary experience, Cameron wanted to continue to sit through London’s traffic jams the same any other ordinary resident, known as aam aadmi in Indian parlance, scoffing at the attempt by the police to frighten him that he would thereby be a ‘sitting duck’!
12 Mint on the Great Indian Bustard being a below-poverty-line species. Way back in 1972, the tiger was chosen as India’s national animal, dislodging the Asiatic lion from that status. That decision, taken at an unheralded meeting of government officials, eventually led to the conservation movement to protect the animal, including such exercises as Project Tiger. At a similar meeting to choose the national bird of India, renowned ornithologist Salim Ali strongly pushed the case of the Great Indian Bustard. The choice fell on the peacock, however, partly because of pronunciation issues, according to those who recall the meeting.
In retrospect, conservationists rue a decision that may have changed the fate of the species, now on the brink of extinction. There are currently only 250 of the large, majestic ground birds, with an unmistakable black cap contrasting with the pale head and neck, surviving in isolated grassland pockets. “Once known as the king of grasslands, the Great Indian Bustard is now a BPL (below poverty line) species,” says Asad Rahmani, director of the Bombay Natural History Society, referring to it being found only in the poorest districts of India. Rahmani has been working on bustards for more than 30 years and has seen how the population has declined drastically from around 1,500 birds in the mid 1980s.