1 Sluggish monsoon may dent India recovery plans (Debiprasad Nayak in The Wall Street Journal) It’s about to start raining in India, a lot, as the monsoon is set to hit the Kerala coast in next two days. But don’t break out the umbrellas and turn down the thermostats in Delhi just yet. This year’s monsoon is expected to creep across the country more slowly than usual.
That’s bad news for Indian farmers and global markets. A delayed onset of the monsoon in the farming belt of northern India will delay planting, which could cause prices to shoot up for products like rice, cotton and sugar. India ranks among the largest producers for these commodities. Indian farmers rely on rain to grow their crops, and the monsoon season accounts for about 70% of total rainfall.
A weak monsoon could push up food prices and with it inflation, testing the new government’s ability to promote economic growth. If the harvest is bad, the effect on the economy will be wide-ranging. The country’s jobs market could be hurt, since over half of the country’s workforce is employed in agriculture. Fewer jobs mean fewer rupees to spend on things other than food. Manufacturers of everything from soap to SUVs are increasingly reliant on rising rural demand for their goods. A slow monsoon could also pinch the sales of these companies.
This year, the summer monsoon is already behind its schedule, as weak winds left the monsoon stranded in the Andaman Sea. The India Meteorological Department is predicting less rainfall this year, in part due to El Niño, a weather pattern that reduces the amount of rain in India.
2 Worst sales for Tesco in decades (Sarah Butler & Sean Farrell in The Guardian) The pressure has increased on Tesco chief executive Philip Clarke after he revealed the supermarket’s worst sales performance in decades, despite spending over £1bn on store revamps and price cuts in a fightback against discounters such as Aldi and Lidl.
Tesco’s sales fell by 3.8% in the three months to 24 May on a like-for-like basis, an acceleration of the 3% slide in the previous quarter. Several analysts noted that the fall would have been 4% if Tesco had used the same standards used by most retailers, which exclude fuel, VAT and sales paid for with vouchers.
Clarke admitted the sales decline was the worst he could remember in a more than 30-year career at the supermarket group, where he first started working as a schoolboy shelf-stacker in 1974. Bruno Monteyne, an analyst at Bernstein Research, calculates that only half of the latest sales falls were the result of price cuts, disruption caused by store revamps and less use of discount vouchers. It means that, even without those self-inflicted hits, Tesco would still be losing sales.
Tesco is not the only major supermarket struggling to tackle rapid change in the industry amid the rise of discounters such as Aldi, Lidl Poundland and B&M Stores as well as the rise of online shopping and convenience stores. Some big investors are losing patience with Clarke, who is 18 months into his plan to revive Tesco after UK profit fell for the first time in 20 years.
Recent industry data shows that Tesco appears to have lost more than 1m customer visits per week, worth £25m in sales, with its market share showing the biggest fall for at least 20 years. A survey by Kantar Worldpanel showed the grocery market was at its weakest for at least 11 years and that excluding inflation and population growth the market was stagnant.
3 Tiananmen: The revolution that almost succeeded (John Simpson on BBC) Tiananmen was a revolution which almost succeeded. It shook the Chinese system to the core. The central aspect of it was the shooting down in cold blood of young, non-violent students by the Chinese army on the night of 3-4 June 1989. But other important aspects have been forgotten. One was how much support existed for the students within the Chinese political system. Another was the violent outpouring of anger against the Communist system from ordinary people right across China.
I spent an entire month wandering round the square, listening to the students who were occupying it. They were certain that the Chinese leader, Deng Xiaoping, the instinctive authoritarian who was nevertheless a committed reformer, was finished. But he wasn’t. After a month during which China’s government was paralysed, Deng finally found a general and a force of soldiers who were prepared to open fire on the students and clear the square.
That night I crouched behind a low wall and watched as the shooting began. My camera crew and I finally left the square when we ran out of videotape. We took refuge in the Beijing Hotel. To this day, the Chinese government maintains that no-one died in Tiananmen Square. Maybe this is literally true, because the real killing ground wasn’t the square itself but Chang’an Avenue, which runs along the front of the square. Without the massacre, Deng Xiaoping would not have survived in power.
Early on in the demonstrations, in May, even many of the party’s top officials had turned against him. I watched as a million cheering spectators crammed into the square. There was floats carrying senior army officers, high court judges and representatives from across the party structure. There was even one from the secret police. The officials on the floats were all waving and cheering and shouting demands that Deng Xiaoping should go. Whenever I meet senior Chinese officials nowadays I wonder if they were in Tiananmen Square that day, supporting the students.
Over the years, as these officials worked their way up through the system, they have introduced many of the changes the students were demanding. But people still can’t choose their own form of government, or even advocate their right to do so too publicly. Many Chinese officials still honestly believe that China can only be held together by firm government. If everyone were allowed to speak out and demand total freedom, the argument goes, the system would collapse and China could easily fall apart.