1 Russia economy shrinks (BBC) The Russian economy has contracted in the first three months of 2015 because of low oil prices, weaker spending and sanctions from the West. It shrank by 1.9% between January and March compared to the previous year, according to the Russian statistics agency. That compares to annual growth of 0.4% in the previous quarter.
President Vladimir Putin has said the government expects Russia’s economy to start growing again next year. But the European Bank for Reconstruction and Development says that it expects the economy to contract by 4.5% in 2015 and 1.8% in 2016.
The country has hit been hard by a sharp fall in oil prices in the past year, its main export, as well as by sanctions imposed by the West over the Ukraine crisis. The Russian central bank has extended anti-crisis measures aimed at helping banks that have suffered from the low value of the rouble and sanctions in Ukraine.
The value of the rouble has slumped 30% against the US dollar over the last 52-week period. The weak currency and inflation has hit spending in Russia.
2 India exports fall for fifth straight month (Anant Vijay Kala in The Wall Street Journal) India’s exports fell for the fifth month in a row in April. Exports fell 13.96% from a year earlier to $22.05 billion, according to data released by the Ministry of Commerce and Industry. They had fallen 21% in March.
Imports also fell as lower global oil prices helped cut the country’s import bill. Imports in the first month of the fiscal year fell 7.48% to $33.05 billion, thanks to a 42.65% decline in oil imports to $7.44 billion.
The trade deficit widened to $10.99 billion in April from $10.09 billion a year earlier. It was, however narrower than March’s $11.79 billion. The weak exports underscore the challenges faced by the South Asian economy that has been struggling to gain momentum despite efforts by policy makers to boost growth.
Sluggish demand in key global markets such as the US and Europe have hurt Indian exports. A steep decline in crude oil prices since June last year has further reduced demand for Indian petroleum products, which have a sizable share in the country’s exports. Exports of petroleum products fell 46.53% to $2.76 billion in April.
A deeper look at the imports numbers gave some mixed signals. Non-oil imports, which are seen as a gauge of spending by companies, surged 12.58% to $25.60 billion. That would comfort authorities that investments in the economy may at last be picking up. However, gold imports jumped 78.33% to $3.13 billion, which could revive concerns of a widening trade deficit that has in recent years weighed heavily on the rupee.
3 Killing at will in North Korea (Khaleej Times) Purges are not new for the reclusive dictatorial regime in North Korea. But the latest one beats them all. If reports emanating from South Korea are true, the defence minister Hyon Yong-chol was executed with anti-aircraft gun for snatching a few winks while his supreme leader Kim Jong-un was holding forth at an event. The previous one was no less bizarre. The number two in the secretive and repressive regime, and Kim’s uncle, Jang Song Thaek, was reportedly fed to dogs in late 2013 for apparently questioning the young leader’s authority.
Purges are what keep authoritarian regimes going. There should be spectacular punishments at regular intervals to strike fear among subjects and exact fealty from them. Kim recently ordered the execution of 15 top officials for their alleged disloyalty. According to South Korean intelligence sources, 70 officials of various ranks have been put to death since Kim took over.
Some argue Kim is resorting to these periodic gory executions only to boost his sagging confidence and firm up his uneasy grip on the military and bureaucracy. North Korea is the most secretive and reclusive of all regimes and defies all international norms. The Myanmar junta, which had long maintained similar insular characteristics, gave way to change and is now opening up to the world and is being accepted by the world community. Similar change looks unlikely in Pyongyang.
Kim presents a challenge to international diplomacy. Several initiatives by the US and others to bring the country into the mainstream have only met with stiff resistance. The regime occasionally threatens nuclear attacks against the US and South Korea. China, which has been its steadfast benefactor, now appears to show some signs of weariness. This should augur well for the suffering and starving people of North Korea and the world community at large.