CANADA: DECELERATING GROWTH

After growing at a red hot annualised rate of 5.8% in Q1 2010, Canada’s Economic growth has come down to just 2% in Q2, 2010. Canadian policymakers now need to look beyond the ‘short cuts’, be it interest rates or output, if they want the Economy to sustain its growth momentum.

Even net exports made a 4.5 percentage point drag on overall GDP growth. Result: In July, Canada’s trade deficit widened to $2.69 billion, the biggest gap since records began in 1971. What’s more? Net exports have not been a positive contributor to GDP growth since Q1 2009. While it does not appear that the drag from net exports will slow down anytime soon, what’s more confusing is the continuing soft inflation (at 1.7%) amid weak productivity growth (0.6% yoy as of August 2010), fast wage gains, and a closing output gap. So, with fragile economic recovery underway and inflation rate at the bottom of its target range, is it appropriate on the part of BoC to further increase the interest rates after already having raised them thrice in 2010?

There are still many who don’t see this as a threat to the sustainability of the Canadian economy in the long run. Jimmy Jean, the US based economist at Moody’s Economy.com tells B&E, “The housing retrenchment was long expected and has not been excessively severe, even showing signs of recent stabilisation. The cooling observed in consumer spending ties in closely with the housing slowdown, which again makes sense and is not overly worrying in light of still-healthy income growth.”

But then, income growth is likely to slow further considering the impact of the weak GDP growth on employment (unemployment rate is already at 8%) and, in fact, one can already see it happening. Second quarter GDP data already indicates a slowdown in consumer spending growth to 2.6% (yoy) from 4.3% in Q1 2010. Though BoC had not replied back to B&E’s queries till the time the magazine went to print, it, however, in its latest press release, accepts that the recovery in Canada will be slightly more gradual than it had projected in its July Monetary Policy Report.

No doubt, looking ahead, the IMF too expects Canada’s economic recovery to be among the strongest of the G-7 countries over the next two years. But, at the same time it should not forget that when an economy is not working normally (as is the case with Canada), one cannot rely on the ‘short cuts’, be it interest rates or output. In other words, policymakers should leave the overnight rates at 1% during their next policy decision on October 19, 2010. Rather, they now need to work towards developing models that have a better understanding of money and credit flows at a more disaggregated level and that include the key institutional features of banking and capital markets. If Canadian policymakers look only at interest rates, inflation, and output, they might miss out on the bubbles that perhaps might be in the making. If that happens, it could spell a disaster for the Canadian economy. Well, they say, it’s always better to be safe than sorry!

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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This one's on the House

Though the rise of income has guaranteed food and clothing to the average Indians, a major portion of them still remain deprived of the third basic requirement – shelter. India has been unable to provide better, safe housing to its over 350 million middle-class population. And the demand is only increasing with another hundred million coming out of poverty, thanks to the high growth of corporate sector and its better economic performance. However, the exponential increase in demand for housing but slow pace of supply is widening the demand-supply gap rapidly, which clearly calls for immediate attention and intervention from the concerned authority.

A close analysis reveals a few basic maladies – bad management and inadequate regulations. To start with, average Indians are least motivated for home-credit, and somewhere it reflects the government’s failure to encourage people to opt for credit. Innumerable economic researches reveal that housing is one of the investment options which directly contribute to the economy in any situation. Well, our government and bureaucrats perhaps forgot that. The proportion of housing loan as a percentage of India's GDP went up from 3.4 per cent in 2001 to 7.25 per cent in 2006, yet it remains abysmally low when compared with other countries. The same in US is 54 per cent, 57 per cent in UK, 40 per cent in the European Union, and 37 per cent in Malaysia, according to the National Housing Bank, a wholly owned subsidiary of RBI. Along with this, limitations in infrastructural development and geographical differences are other primary hassles.....Continue

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The Sunday Indian

Setting the pace

The elephant moves slowly but firmly. Its motionless figure is often undistinguishable from the brown background of forests, especially in the summers, till one reaches well within its striking distance. Bahujan Samaj Party seems to have acquired some such qualities of its election symbol. The party doubled its vote share in all the four state Assembly elections in the Hindi heartland – Madhya Pradesh, Chhattisgarh, Rajasthan and Delhi – touted as the semifinal before the General Elections due within next six months.

So will it repeat the feat in the finals as well – in the general elections that are due in six months time? It pretty well might. For consider: it took the BSP – founded in 1984 – four Assembly polls (with a single-digit tally each time), three Parliamentary elections and a pre-poll tie up with the Samajwadi Party in 1993 to make its presence felt in Uttar Pradesh. The party had brief stints at power there with the Bharatiya Janata Party’s support in 1995, 1997 and 2002, before it secured a complete majority in the Uttar Pradesh Assembly election last year. Those who smirk at the BSP’s tally this time – two seats each in Delhi and Chhattisgarh, six in Rajasthan and seven in Madhya Pradesh – need to wake up to some facts that are not so clearly written on the political wall. Its vote share in Delhi rose to 12; in Madhya Pradesh to 11; in Rajasthan to eight; and in Chhattisgarh to six.

Significantly, all these states have traditionally been two-party states, with almost no space for a third party. The Bahujan Samaj Party still bagged well over 10,000 votes in nearly half of the constituencies it contested in Delhi, and a quarter of those it did in Rajasthan and Madhya Pradesh. “In Delhi, it demolished the notion that the BSP would damage only the Congress,” conceded a senior BJP leader, who naturally did not wish to be named. And he added that but for the BSP, the Congress would almost certainly have registered an even more emphatic win in Rajasthan than it eventually did.....Continue

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The Sunday Indian

Dmitry’s tango in us backyard

Russian President’s visit to South America may well have been pegged as intended to unfasten business prospects for Russian business interests, but in reality it was to demonstrate that Moscow could manoeuvre in the US backyard in the midst of apprehension over Washington's interest in Eastern Europe and the Caucasus. Dmitry Medvedev wrapped up a week-long tour of Latin America last week with a meeting with Fidel Castro premeditated to reinstate a coalition and reinforce his country's position in the region.

Earlier last week, Medvedev and Venezuelan President Hugo Chávez together gave the preliminary shot for a combined marine exercise in the Caribbean. The two nations also signed a nuclear collaboration accord. Also, Russian Foreign Minister Sergei Lavrov is visiting Ecuador to talk about nuclear collaboration with Quito.

Analysts say Russia wishes to reinforce ties with socialist regimes in Latin America in retort to US procedure to build a missile shield in Eastern Europe. Medvedev is the first Russian President to visit Cuba since 2000. Russian representatives refute that Medvedev's trip is intended to aggravate the US, but the voyage incorporated get-together with Washington's staunchest adversaries in the region.....Continue

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The Sunday Indian

Inclusive growth needs to be given one more fillip to help arrest ultra movements

While the politicians are expected to do no better, what is, indeed, disturbing is that even our intellectuals, media experts and/or political analysts sometimes begin to speak their language. That’s how this dominant, hegemonic political discourse becomes a form of social and intellectual discourse, too. Sometimes, I’m compelled to believe that Bollywood offers a much better, sharper and more critical understanding of our social and political issues than our politicians, media experts and analysts put together.


Neeraj Pandey’s recent movie, “A Wednesday”, scores over several other movies on the familiar theme of ‘terrorist violence’ for two different reasons. One, because it helps us understand that one should never underestimate either the patience or the anger of a common man. If pushed too far, he may choose to find his own weird solutions to the growing menace of terrorism. Two, because it succeeds in putting human face on terror, almost inviting us to sympathise with the ‘characters’ we have only learnt to hate over the years. Neeraj Pandey doesn’t leave us in any doubt that the real question is not whether the terrorist is a Hindu or a Muslim, because he only practices the ‘religion of hatred and terror,’ something that all religions unequivocally denounce. The real question is that a terrorist, too, was a human being much before he became a terrorist. In other words, it’s the denial of social justice coupled with economic deprivation that often compels a human being, regardless of his religion, to pick up the gun. In a way, when an individual takes to terrorism, he is making a loud statement. He wants to scream and tell the society: ‘You have pushed me into the oblivion, and here I return, in my new found anonymity to throw your orderly, patterned lives into absolute ruin and anarchy.’ Terrorism is the last outpost of a civil society, triggered off by the failure of dialogue between the citizen and the state, especially when the state fails to deliver. It’s an utterly helpless scream of those citizens who wish to be heard and seen, even ready to enter a system that delivers or assures them a decent place in the mainstream. Be it Kashmir or Nagaland, Assam or Punjab, ‘terrorism’ has reared its ugly head in all those places where the process of development has given common people a miss, or wherever it has substantively failed to transform the lives of the people at the grassroots. Rather than indulge in useless rhetoric, let us give development and inclusive growth one last chance. Also let us give our people, no, not just vague promises (for they have had surfeit of these already), but a genuine reason to believe that justice is possible for all, regardless of their status, position, caste or religion. Who knows, somewhere it may help us minimise, if not eliminate, the ‘horrendous impact’ of this ‘national problem’!...Continue

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The Sunday Indian

Bangladeshi migrants

The situation in Assam, meanwhile, continues to be grim. There are around six million illegal Bangladeshis. The Gauhati HC had earlier this year said that “Bangladeshis had become kingmakers in Assam”, and stressed on the need for a “strong political will” to remedy the situation. Some 855 students had died in the Assam Agitation in the 1970s and ‘80s, a movement aimed at forcing the government to identify and deport illegals. The situation, however, shows no sign of improvement even after the SC scrapped the controversial Illegal Migrants (Determination by Tribunals) Act, 1983, a piece of legislation that was tailor-made to protect the illegal Bangladeshis in Assam.

Arunachal Pradesh, on the other hand, seems to gain immensely from the inner line permit provision that it has, being a sensitive border state, a provision that was often seen as an obstacle in the state’s development. Here too, however, the political will is striking compared to the scenario in Assam, which through full page advertisements declared that hundreds of alleged Bangladeshis, who had been pushed out of Arunachal and Nagaland a few months ago, were in reality Indian citizens, something that should have left to the judiciary to determine. “So far as our government is concerned,” said Tsering Gyurme, parliamentary secretary and principal adviser to Arunachal Pradesh CM Dorjee Khandu, ”the inner line permit does not allow even Indians to settle in our state. So there is no question of outsiders. We even insist on Arunachalis travelling out of the state to carry identity papers.” There is an increase in the number of illegal Bangladeshis now working in Itanagar. And what of the fact that the Tarun Gogoi government had declared that the suspected illegals pushed out of Arunachal were Indians? “That’s Gogoi’s problem,” Gyurme told TSI. All Bangladeshis who were working in Arunachal Pradesh had been identified and “could be shunted out anytime”, he added. “This is not like Assam where people can come in anytime, settle and get permanent resident certificates.”

The All Nyishi Students’ Union (ANSU) had served a quit notice on alleged Bangladeshis in September this year. The students then physically removed a number of alleged illegals, which led to the All Minority Students’ Union in Assam blocking National Highway. While Arunachal home minister Jarbor Gamlin had at that stage said that there were around 8,000 illegal Bangladeshis in Arunachal, the state unit of the Congress had come out in support of the movement by Arunachali students. “We support any move to free the state of migrants,” Nabam Tuki, president of the state unit of the Congress had said at that point. Support for the innerline permit meanwhile only grows. He blamed the Border Security Force for letting in Bangladeshis. “No one goes from Assam to bring Bangladeshis into Assam,” he said, “the paramilitary forces simply let them in.”

And just how far are these governments willing to go to protect the rights of it heir people? One indicator would perhaps suffice: asked about the 1974 Indira-Mujib Pact, which has turned out to be a major impediment in so far as repatriation of Bangladeshi illegals from India is concerned, and which groups such as the Asom Gana Parishad (AGP) in Assam demand that the government renegotiate with Bangladesh, Lyngdoh was clear of his government’s stand: “Our state laws do not permit even Indian citizens to buy land in our district councils. So the Indira-Mujib Pact will not work here,” he said....Continue

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The Sunday Indian

About the ‘buzz’

When a mosquito buzzes around you, something quite fascinating is happening. When any insect flaps its wings, the air above the wings swirls around and creates a pocket of moving air above the wing which has less pressure than the air below, lifting the insect upward. These little whirlpools are known as leading-edge vortices. Birds are able to fly the same way.....Continue

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The Sunday Indian

Can more than one Superpower work together for a better world?

This friction got heated up after Russia deployed its strategic bomber over the Caribbean and participated in joint naval exercises with Venezuela. The tasks took place immediately after the US aid delivery reached Georgia, post war. Venezuelan President Hugo Chavez stated (September 11, 2008) that these moves point towards "a multi-polar world". He said, "The Yankee hegemony is finished." Since the activities are happening in US-influenced regions, the next wave of cold war might spread to the Middle East. This hypothesis is evident from Syrian President Bashar Assad's statement (with reference to US-Russian confrontation) that appeared in Middle East Times on October 13, 2008, “Flames from one part of the world spreads to other regions and the fire becomes twice as strong.” It requires no rocket science to comprehend that Middle East would never want to get crushed between Russia and the US.

Leaving all this geo-politics at bay, it’s beyond doubt that world powers (and emerging powers) have wasted a lot of time in keeping the war hot. These powers could have easily solved many global conflicts to an extent, if not entirely....Continue

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The Sunday Indian

State HC orders unusual step to record victim's version

"How can the courts be helpless in recording evidence of a deaf and dumb person when a number of sign language experts are available to help to communicate?" Justice Ranjit Singh wondered while holding that evidence of prosecutrix (victim) recorded in this manner would be permissible under law.

No wonder, Sundari was enabled to depose due to judicial intervention which made this mode of deposition permissible under law, a development that can impact such cases in future. Inquiries indicate that the victim gave a graphic description of the incident with the help of sign language experts but against her will. However, the sign language could not go farther to provide details of the accused. But encouraged by historic HC orders about legal validity of the use of sign language and the interpretation flowing from it, Sundari was not far from recognising the accused. The trial court did not appreciate the sensitivity of the issue but the HC lent a voice to the victim to rescue her in time....Continue

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The Sunday Indian

Reversed: Diversity in unity!

IIPM Publication
‘Pride’ goes regional. First it was Gujarati Pride, then Maharashtrian Pride and now finally, Bihari Pride. ‘Pride’, the synonym of ‘identity politics’ rains votes, a realisation to which Bihari politicians had recently woken up. Not long ago, it was a cardinal sin to discuss ‘unity’ with Bihari politicians. But the landscape has changed after Bihari students trying to take a railways test in Mumbai were battered by Raj Thakreys goons. Now they all stand together. What a sight: Rashtriya Janata Party supreme Lalu Prasad, Janata Dal (U) top gun Nitish Kumar and Lok Janshakti Party leader Ram Vilas Paswan addressing the same press conference and speaking the same language!

But the dream did not last. The bubble burst when Chief Minister decide to go one up and sent word to all his five Members of Parliament to resign on the issue of Biharis’ being harassed in Maharashtra. And they did. Their resignations were accepted by Lok Sabha speaker Somnath Chatterjee on November 11. An enraged Lalu Prasad has challenged that if JD (U ) is at all serious about Bihari pride, they should ask even their MLAs and Council members to resign!...Continue

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The Sunday Indian

From creating adequate infrastructure to cashing-in on lucrative business opportunities, this state is writing newer benchmarks.

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

From creating adequate infrastructure to cashing-in on lucrative business opportunities, this state is writing newer benchmarks. Call it the ‘Andhra’ benchmark! angshuman paul explains why...

In fact, cajoling investors by pro-actively supporting them has been the growth mantra for Andhra. Walk into Andhra Bhavan in the national capital if you need a psychological proof of the same where giant hoardings greet you, claiming what the Government has done to develop infrastructure and how it’s keen to help investors. Even Balvinder Singh Kalsi, President & CEO, DuPont India, who is investing Rs.1.5 billion by November 2008 to set-up a sprawling knowledge centre in Hyderabad confirms, “The Andhra govt. has been very co-operative and compared to other states, it has been politically peaceful. In fact, Andhra is one of those states where investors find no political disturbances.”

Infrastructure development, cashing in on lucrative businesses supported by enticing investors, Andhra is proving wrong every critic that doubts its status as the Best Marketed State in India. Christened as Vision 2020, Andhra has also planned out its investment inflow targets till 2020 – a super-collosal $750 billion! However, this state has an Achilles heel – tourism! Beyond Hyderabad and pearls, it has missed out on highlighting its costal tourism spots. The result is that while on one hand, it can boast of the highest count of domestic tourists (with the figure at a respectable headcount of 12.79 crore in 2007), its foreign tourist count is pathetic; proving why the state misses out on the thick revenue stream. And though it’s making efforts today as Ram Narayan, Tourism Minister, Andhra Pradesh claims, “Our efforts are to make Andhra Pradesh a leading state with regard to inbound foreign tourists as well.” Andhra has one last opportunity left untapped, for which it has also tied-up with Iran’s Cultural Heritage, Tourism and Handicrafts Organisation (CHTHO).

Really, critics talk about the sudden spurt in capitalistic interests of Andhra and its pitfalls, but one thing’s for sure – it takes a lot to walk away with the glorious crown! Andhra is crowned the 4Ps B&M Miss India State 2008; what a moment of pride for all Andhrites!!!

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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A heated argument!?!?

No worries. The dehumidifier is ready to fan out the heat

In an increasingly globalised world, businesses want innovative solutions as and when required, and companies that identify lacunae can reap the benefits infinitely. Dehumidification services are one such gap as there is tremendous potential in this sphere. Even though it may not be a business proposition making headlines, it is an important solution today. In a world, where safeguarding expensive technologies and equipment from atmospheric humidity is important, the use of dehumidification techniques becomes paramount. Bry-Air Asia enters the picture here.

A global solution provider in humidity control, drying and air-gas purification, Bry-Air has a presence in all the five continents. With a 90% market share in India & Asia Pacific (APAC) region, its operations in APAC need a special mention. “In India and the subcontinent, we have been pioneers in bringing the concept of humidity control through dehumidification. We have been educating and growing the market for over 25 years,” explains a confident Deepak Pahwa, MD, Bry Air. Bry-Air is one of the few Indian companies, which had gone global early on. The company has bases in high-potential markets such as China, West Asia, Europe and South-East Asia. With almost four offices and a manufacturing plant in China, Bry-Air has established itself as a competitive force in the dragon country.

Just like the food industry, aeronautical industry is highly dependent on demoisturising techniques in a major way, in functions such as aircraft maintenance, engine storage and landing/take-off. With an impressive list of satisfied customers, that include corporations like Taikoo Aircrafts Engineering and Airport Authority of India, Bry-Air is surely going places. Surprisingly, even after setting up an additional plant in Malaysia, to cater to the fast-expanding South-East Asian market, the company was not satisfied with its expansion spree. So, it acquired Germany-based, A+H Hamburg, to become the first Indian HVAC&R (Heating, Ventilation, Air Conditioning & Refrigeration) company to acquire a foreign company. According to Pahwa, “We are actively looking at a couple of other acquisitions in Europe. With a licensee in Brazil and an associate plant in the US, we have our network all over the world.” Not bad for a company that expects to touch a turnover of Rs.230 crore in the FY-09 and Rs.400 crore by 2010-11.

As a party pooper though, Bry-Air will feel the heat of competition, as the marketplace will soon be flooded with other low-cost manufacturers. But Pahwa added that “our mantra has been and continues to be to provide the best international technology to the customer. The market opts for better technology, better support and a reliable product.” On a relentless drive to move further, the company is experimenting with more advanced and cutting-edge technology. Not satisfied with its already well-proven track record, Bry-Air is looking at greener technologies and services as well, as its sister company, DRI is ready to make foray in this direction. Perspiring with all the action here? No worries, we have the dehumidifiers ready for you. Still feeling hot?

Edit bureau: Karan Mehrishi

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

For More IIPM Info, Visit below mentioned IIPM articles.
When IIPM comes to education, never compromise
IIPM, GURGAON
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