24.10.10
Pakistan & the US
For months now, the Obama administration has dinned the same message into the Pakistani leadership: get over your obsession with India; the danger to Pakistan comes from within. Each time, the Pakistani response has been the same: No, we can’t. So it was this week, too, as Washington mounted yet another concerted effort to persuade Pakistan to address its internal crises in the course of a three-day “strategic dialogue”. But at the end of the engagement, Pakistan’s litany of India-related grievances and demands remained undiminished: A nuclear deal on a par with the one with India (not met), US Presidential visit to match India’s (partly met), more arms and money (being considered), and of course, the Kashmir issue. In a drive evidently driven by Pakistan’s domineering military-security establishment, represented at the Washington talks by army chief Pervez Ashfaq Kayani, Pakistan’s foreign minister Shah Mehmood Qureshi boldly pitched for US mediation into its vexing dispute with India, going as far as to challenge President Obama that “his coming visit to the region is the time to begin to redeem the pledge that he made earlier” of a US role in the Kashmir issue. Although President Obama made no explicit pledge regarding Kashmir, Qureshi appeared to be referring to reports during the Presidential campaign when Obama remarked that “working with Pakistan and India to try to resolve the Kashmir crisis in a serious way” would be one of the “critical tasks”. But since assuming office, Obama had dialed down on the issue. He and any number of high-ranking US officials have reverted to the familiar American position that the issue is bilateral and best resolved in that context, evidently realizing that Kashmir is just a pretext for Pakistan’s military-security establishment to continue its confrontation with India and extend its hold on the country. On Friday, it was the turn of US special envoy to Afghanistan and Pakistan Richard Holbrooke. “We will be happy to be of help, if both sides want us to be. But we are not going to unilaterally put ourselves in the position of intermediation on issues in which our presence, our direct involvement, if not desired by both sides, would work against that objective,” Holbrooke said. “We are not going to put ourselves, without invitation, into a position of intermediation in a position—in an issue of such extraordinary and historic sensitivity,” he added.
Bharat Diamond Bourse snippets
BDB can rank among commercial structures with the costliest insurance cover of approximately Rs. 510 crore as the policy only provides insurance for the building. There are other buildings that have higher insurance policy, but those include other wares as well. For example, a room in a five-star hotel is insured at Rs 1 crore, but this also includes costly furniture and furnishing,’’ said an industry source. Bourse chief Anoop Mehta added: “We are planning to buy a bigger policy in the coming months. The existing cover is based on the fact that the building was under construction till recently. Though the existing policy was renewed in September, we will carry out an evaluation of new facilities like basement car parking etc. while opting for higher cover.’’ The fortified BDB is spread over 2 million sq feet and is expected to attract nearly 25,000 visitors daily. As of now, there are around 500 personnel working in three shifts but this figure will touch 1,300 once the bourse become fully operational, say officials. Once fully operational, the BDB will boast of diamond stock worth Rs 10,000 crore on any given day. The building is expected to house 2,500 small and big traders and one can imagine the business they will generate for insurance firms. Explained BDB managing committee member Viral Shah: “Each trader will opt for individual policies, including block policy that will cover the diamond stock, employee insurance and even a policy for furniture and fixtures. A trader having diamond stock of nearly Rs 1 crore will go for a cover of at least Rs 15 lakh. On an average, the traders will shell out an annual premium of Rs 30,000 per annum towards insurance for a stock of Rs 1 crore.’’
23.10.10
India & China
China said its economy expanded at the slowest pace in 12 months during the September quarter as a World Bank report tipped it to slow down further in 2011, raising the possibility of India becoming the fastest-growing economic powerhouse next year. The world’s second-largest economy grew 9.6% in the three months to September, just two days after the World Bank pared its growth forecast for the year ending December 2011 to 8.5%. This is a tad below the bank’s growth projection of 8.6% for India during the same period. For the fiscal year 2011-12, the multilateral lender has forecast an 8.7% growth for India. Though the difference is marginal, the eventual numbers will depend on how the countries overcome several challenges that could upset their growth prospects. Faced with a 23-month-high inflation and growing pressure from the rest of the world to let its currency appreciate, China faces severe headwinds to growth. “With weak global growth and fading impact of the stimulus package, we project growth to slow to 8.5% in 2011,” said the World Bank report.
In absolute terms, however, China’s gross domestic product at $4.9 trillion is about 3.78 times that of India’s. The US economy, the world’s largest, is 2.9 times the size of China’s and 11 times India’s. Others also expect India to start growing faster than China, but not so soon. A research report by Morgan Stanley had said India could overtake China’s growth rate by 2013 and expected it to be notably ahead from 2015 onwards. China’s industrial production also fell from the previous quarter to 13.3%, a report of the National Bureau of Statistics said. “China growth forecast is a bit on the downside,” said Jehangir Aziz, chief economist, JPMorgan. He expects China to grow closer to 10% for FY11. Nonetheless, there is agreement among economists that China faces many hurdles ahead. The Chinese central bank raised the benchmark interest rate by 0.25% to 2.25% on Tuesday after nearly three years to rein in prices and inflation, which touched a 23-month high of 3.6%. The Chinese government earlier in the year had set a ceiling for inflation levels at 3%, and had predicted that inflation would moderate in the second half of the year. Its biggest worry, however, would be the growing global friction over currency values and calls for China to let the yuan appreciate and address the large surplus it runs with other countries for better distribution of growth. But China’s main challenge going forward would be to change the structure of the economy, from an export-driven to consumption-driven economy, wherein it becomes less prone to external shocks in demand.
In absolute terms, however, China’s gross domestic product at $4.9 trillion is about 3.78 times that of India’s. The US economy, the world’s largest, is 2.9 times the size of China’s and 11 times India’s. Others also expect India to start growing faster than China, but not so soon. A research report by Morgan Stanley had said India could overtake China’s growth rate by 2013 and expected it to be notably ahead from 2015 onwards. China’s industrial production also fell from the previous quarter to 13.3%, a report of the National Bureau of Statistics said. “China growth forecast is a bit on the downside,” said Jehangir Aziz, chief economist, JPMorgan. He expects China to grow closer to 10% for FY11. Nonetheless, there is agreement among economists that China faces many hurdles ahead. The Chinese central bank raised the benchmark interest rate by 0.25% to 2.25% on Tuesday after nearly three years to rein in prices and inflation, which touched a 23-month high of 3.6%. The Chinese government earlier in the year had set a ceiling for inflation levels at 3%, and had predicted that inflation would moderate in the second half of the year. Its biggest worry, however, would be the growing global friction over currency values and calls for China to let the yuan appreciate and address the large surplus it runs with other countries for better distribution of growth. But China’s main challenge going forward would be to change the structure of the economy, from an export-driven to consumption-driven economy, wherein it becomes less prone to external shocks in demand.
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