online editorials

Necessary but not good enough

noreply@blogger.com (Sravanthi) — Mon, 3 Oct 2011 07:14:00 +0530

A political declaration adopted recently by more than 30 world leaders and 100 senior Ministers at the United Nations General Assembly is a welcome first step in tackling four non-communicable diseases (NCDs) — cardiovascular diseases, cancers, chronic respiratory diseases, and diabetes. The declaration calls on all governments to “advance the implementation of multi-sectoral, cost-effective interventions in order to reduce the impact of the common NCD risk factors without prejudice to the right of sovereign nations to determine and establish their taxation policies, other policies, where appropriate.” Unfortunately, the consensus declaration is a let-down when it comes to committing to robust measures, including legislation, for taming the risk factors related to the NCDs. Evidently, pressure from the food and beverage industry on the governments of some rich countries stymied forward-looking efforts to discourage the consumption of unhealthy food and to regulate harmful market practices. We know that policy-led solutions aimed at the prevention and control of NCDs by taming the risk factors do work: this can include banning a practice, product or ingredient; mandatory labelling; or limiting the quantity of an ingredient in a product. Ban on smoking at work and public places and mandated pictorial warnings on tobacco products have produced good results. WHO Director-General Margaret Chan did well to demand full implementation of the WHO Framework Convention on Tobacco Control and call on the heads of state and government to “stand rock-solid against the despicable efforts of the tobacco industry to subvert this treaty.”Dr. Chan also did well to speak out against “processed foods, very high in salt, trans-fats, and sugar,” which were “readily available and heavily marketed” and had become “the new staple food in nearly every corner of the world.” Trans-fat increases the risk of cardiovascular disease but the food industry loves it because trans-fat extends the shelf life of products. Denmark took the first bold step in 2003 by banning it; Austria and Switzerland followed in 2009, and a few more countries are likely to mandate a reduction or complete elimination of trans-fat. Salt and sugar cannot be completely eliminated, but their intake can be reduced. There are effective ways of discouraging their consumption — for example, banning marketing directed at children and restricting the sale of these products at and near schools. Developing countries like India can do their people a world of good by acting on this knowledge of what needs to be done here and now to reduce their unconscionably high NCD burden.

Al-Awlaki, al-Qaeda and drones

noreply@blogger.com (Sravanthi) — Mon, 3 Oct 2011 07:13:00 +0530

The killing of Anwar al-Awlaki in a drone attack in Yemen shows the extent to which the C.I.A has succeeded in putting together an effective intelligence gathering system on the ground to track al-Qaeda's leadership. It is the second important catch for the United States after the killing of Osama bin Laden in Pakistan earlier this year. Awlaki had been on the C.I.A radar ever since a U.S. military doctor killed 13 fellow soldiers at a Texas military base in 2009. Immediately before that incident, the medic had exchanged emails with the American-born Yemeni cleric who lived and preached in the U.S. until 2002. Awlaki was said to have inspired others arrested in the U.S. for terrorist plots, such as the Nigerian ‘underwear bomber,' and the Pakistani-born Times Square bomber. He was also linked to the 2010 airline parcel bomb, and though he was never named in the 9/11 attacks, three of the bombers were said to be in frequent contact with him. President Barack Obama has described him as the chief of “external operations” of “Al-Qaeda in the Arabian Peninsula.” But his role was more of a propagandist whose fluent English and insider knowledge of the west appealed to the young American and British Muslims al-Qaeda sought to radicalise and recruit. Also killed in the attack was another American citizen, Samir Khan, who was the editor of al-Qaeda's magazine Inspire. More than Awlaki's elimination, the gain for Washington would be the panic and insecurity that the manner of his killing is likely to have created in the top al-Qaeda leadership: from a Hellfire missile fired by an unmanned plane that had the information to pinpoint his location exactly as he travelled with companions across a desert in North Yemen.Believing the al-Qaeda's Yemen operations were now a bigger threat than what was left of it in Pakistan, the C.I.A sought to expand its covert war against the group by building a secret base in the Arabian peninsular region earlier this year. Awlaki's killing would seem to be a fairly quick payoff. As Pakistan and Yemen are thought to cooperate in the C.I.A's drone operations, the question of U.S. violation of the national sovereignty of those countries finds no resonance in the world today, despite the dangerous precedents it sets in international relations. It is ironical that Awlaki's killing has drawn protests against the Obama administration's denial of due process to an American citizen. Something is clearly wrong if American rights activists can work up so much outrage on behalf of a fellow citizen linked to al-Qaeda but not for the innocent civilians who perish in C.I.A's drone attacks in Pakistan.

Justice, at last

noreply@blogger.com (Sravanthi) — Sat, 1 Oct 2011 07:21:00 +0530

In many ways, Vachathi was a test case: not so much for the judiciary as for India's social conscience. In June 1992, this tribal hamlet in northern Tamil Nadu was witness to what brutal law enforcers and callous government officials could do to the poor and the powerless. Women were raped, men were assaulted, houses were looted and destroyed, and cattle were killed, all in the name of upholding law, of preventing the illegal felling and smuggling of sandalwood. The planned, systematic attack on Vachathi was carried out quite brazenly. The 269 persons arraigned as accused by the Central Bureau of Investigation must have thought that they could get away with crimes against the hapless villagers, who were offenders in the eyes of the law. Nothing else can explain the seeming impunity with which they went about the assault on the village. While men in the lower ranks indulged in violence, senior officers watched from a distance. The subsequent attempts at denial and cover-up were indicative of sanction for the attack from elements at the higher levels of the government. That the tribals of Vachathi slowly found their voice in the face of such repression, and fought for justice in the courts during these 19 years with support from social and political organisations and human rights activists, is reflective of the strengths of a democratic society, notwithstanding its obvious inequities and deficits. The wait for justice might have been long and tiresome, but was finally rewarding. That people's struggles can have a decisive impact on the course of justice was clearly demonstrated in the Vachathi case.But what is worrying is that such attacks can happen in the first place. Those given charge of enforcing the law often see themselves as above the law. Uniformed forces, especially, think nothing of trampling on the rights of ordinary citizens. Misuse of power and abuse of authority are seen as perks of office. Security personnel and government officials are themselves steeped in social prejudices, and tend to show little respect for the rights of those lower down in the societal hierarchy. The correct lessons must be learnt from Vachathi. The verdict of the district and sessions court, holding all the 215 surviving accused in the case guilty of various atrocities, should serve as a reminder that the rule of law will have to be upheld everywhere, including in the remotest of villages. Atrocities and violations of rights anywhere shall not go unnoticed, and there can be no refuge for the law-breakers, especially for those from among the law enforcers. Civilised India cannot afford a repeat of Vachathi.

Angela Merkel's moment

noreply@blogger.com (Sravanthi) — Sat, 1 Oct 2011 07:19:00 +0530

After the recent annual IMF-World Bank meetings in Washington, which brought together finance ministers and central bank governors of member countries, the euro zone's sovereign debt crisis is not any nearer a solution. Despite considerable pressure from other members, the leading European countries failed to draw up a specific bail-out plan that could stave off default by one or more eurozone countries. That is particularly unfortunate. Recent developments have conclusively established that the eurozone is not an island. Its fast-escalating problems can hardly be confined to its geographical boundaries, let alone the continent's periphery, as was imagined earlier. It is clear that the consequences of a sovereign default will have global ramifications. Even the more optimistic of predictions points to a banking-led liquidity crisis in the aftermath of a default by Greece. As banks dump their holdings of sovereign debt and pull back their loans, the global economy will face a severe credit crunch. Unemployment will rise and, along with it, social unrest. Large banks will cut back on their exposures even to countries not directly involved in the crisis. The U.S., already witnessing anaemic growth, will be dragged into a double-dip recession. The euro, as a currency, could be a significant casualty.None of these need happen if the eurozone countries had a credible plan of action and, equally importantly, dynamic leadership. Much was expected from Germany, the eurozone's strongest and most influential economy, the very foundation of the euro and the only member with the necessary resources and stature to sustain it. Yet over the past two years, as Greece followed by Ireland, Portugal, Spain and Italy tumbled into a crisis, Germany has been a reluctant member of the rescue team, clearly unwilling to commit to the costs of deeper fiscal unity in the eurozone. One reason for Germany's inhibitions has been the way the monetary union — comprising 17 members, each with different goals and interests — stands organised. Every member has a veto and important proposals such as augmenting the European Financial Stability Fund need to be approved by their Parliaments. Political opposition to a greater integration has been the strongest in Germany. Although the ruling coalition lost in some recent state elections, the Bundestag vote that Ms Merkel convincingly won on Thursday to increase Germany's commitment to the eurozone rescue fund is clearly a measure of her own domestic political strength. Whether that delayed action will be enough to shore up the euro and the many wobbly economies on the continent is yet another matter.

Diabetes Alarm

noreply@blogger.com (Sravanthi) — Fri, 30 Sep 2011 07:28:00 +0530

New data on the population-level prevalence of diabetes in India underscore the need for a major public health initiative aimed at prevention and control of the condition. Small-scale studies highlighted the problem earlier, but the just-out results of the first phase of the Indian Council of Medical Research-INdia-DIABetes (ICMR-INDIAB) study in Maharashtra, Tamil Nadu, Jharkhand, and Chandigarh present more robust evidence that diabetes is growing in urban and rural areas. The scale of the challenge is clear from what is now empirically established. In just three States and one Union Territory, the number of people classified as pre-diabetic is an estimated 14.73 million, and 11.88 million are confirmed to be diabetic. These groups represent a significant percentage of the total population. Diabetics form 10.4 per cent of the total population in Tamil Nadu, 8.4 per cent in Maharashtra, 5.3 per cent in Jharkhand and 13.6 per cent in Chandigarh. For pre-diabetics, the percentages are 8.3, 12.8, 8.1 and 14.6 respectively. It is reasonable to assume that the story is not very different in demographically similar States and future data are likely to confirm that. Going by medical evidence, a quarter of the patients with diabetes are at risk for coronary artery disease, eye and kidney damage, foot complications, and the like. These trends are bound to increase disease burdens and health care costs over time.The policy imperative is to identify those at risk through established protocols, initiate prevention strategies, and offer good health care to diabetics. Data from the ICMR-INDIAB study demonstrate that periodic screening can reduce the ratio of new cases of diabetes to known cases. Tamil Nadu fares the best in this regard among the States studied, which points to higher public awareness. A significant finding is that urban residents in all the States had higher Body Mass Index, waist circumference, and systolic and diastolic blood pressure, and also a higher prevalence of diabetes, than residents in rural areas. Many studies have shown that lifestyle modification plays a major role in preventing the onset of diabetes in pre-diabetics, who have Impaired Fasting Glucose or Impaired Glucose Tolerance. Treating diabetes involves a much lower cost than managing the serious complications that set in later. The ICMR-INDIAB study presents a more complete picture of diabetes than what has been available at the population level. The insight it provides must inform public health policy. The way to go is to facilitate low-cost testing and expand specialised treatment. In parallel, governments must promote healthier lifestyles through an effective and innovative mix of policy measures.

French Senate goes left

noreply@blogger.com (Sravanthi) — Fri, 30 Sep 2011 07:26:00 +0530

For the first time since the Fifth Republic was founded in 1958, the French political left have won an absolute majority in the Senate. In elections held on September 25, a broad front, ranging from the Communist Party through the Socialist Party (PS) to the Europe Ecologie-The Greens (EELV) and left radicals, gained 175 of the 348 upper chamber seats. The Socialist Party, which now has 127 Senators, is their single largest contingent. The French right, which has traditionally dominated this house, has been badly shaken by the loss of several stronghold seats, including Loiret in north-central France. The Senate is elected by a college drawn from the lower tier assemblies, namely those of the regions, cantons, and municipalities. Across the country, the left have won heavily at all those levels during the last three years and, as municipal councillors comprise 95 per cent of the electoral college, the Senatorial left will now have much greater weight in its dealings with the President. It will be able to direct Senate powers towards controlling the executive, especially by using commissions of inquiry. It will be able to propose legislation, although the lower house, the National Assembly, which is still controlled by President Nicolas Sarkozy's Union for a Popular Movement (UMP), retains the last word in the legislative process.The result reflects the public mood in France, the strength and depth of broad left opinion at the grassroots level. As for the clout this provides, the leading Socialist Party Senator, Jean-Pierre Bel, says his party does not intend to be obstructive — but will use the Senate's constitutional powers to the full. The political climate is therefore likely to change significantly. President Sarkozy, who has seven months left of his five-year term, is already in serious trouble. He is beset with corruption scandals, including allegations of illegal party funding obtained through kickbacks in arms sales to Pakistan. He is trying to revive a foreign policy mired in the Libyan sands by his own adventurism. His poll rating of 37 per cent, although slightly up owing to the intensification of his anti-immigrant rhetoric, cannot conceal his overall unpopularity. While the Socialist Party still has a lot of work to do before next year's presidential election, the capture of the Senate has reinvigorated the French left. The radically altered membership of the upper house can give Mr. Sarkozy a very rough ride from now on, thereby ensuring that the Socialist candidate has an advantage when French voters choose their next President.

Miliband Senses The Mood

noreply@blogger.com (Sravanthi) — Thu, 29 Sep 2011 07:07:00 +0530

Ed Miliband, leader of the British Labour Party, has, on the occasion of the party's annual conference, made a speech that signals a significant departure from the ‘New Labour' vision of the Blair-Brown era (1994-2010). Speaking in Liverpool, Mr. Miliband addressed a national mood of uncertainty and fearfulness about the future, in which ordinary people feel that they are at the mercy of forces and institutions they cannot control and which are indifferent to their fate, and feel further that the rapidly increasing inequalities in British society are threatening Britons' very sense of who they are. Among other things, the Labour leader attacked the Conservative-led coalition government for proposing to cut the maximum tax rate of 50 per cent for those earning over £3000 a week; for planning to cut corporation taxes for banks; and for raising university fees to a level that will leave all but the richest students tens of thousands of pounds in debt.Such moves took courage, as they were guaranteed to draw fire from the Tory-supporting majority of the national press. Mr. Miliband, however, knows that many of the worst features of the last three decades, such as the banking crisis (after which the public bailed the banks out to the tune of almost £1 trillion), rigged markets, the MPs' expenses scandal, and the phone-hacking by journalists, have created a “something for nothing” culture in which the predatory and the unscrupulous deprive the honest majority of the things they deserve. The Labour leader was as sharp about poorer people's illegalities and exploitation of state benefits as he was about the plunder at the top, notwithstanding the differences in scale at the two ends of the system. As for detailed policies, these cannot normally be expected on such occasions but Mr. Miliband indicated potentially major new approaches to political economy, including workers' representation on committees that decide directorial pay levels, greater emphasis on ethical conduct in business, and rewards for firms that invest for the longer term. These amount to more than just policy directions stated in the Labour leader's customary low-key manner. They show Mr. Miliband's quiet strength and confidence both in his sense of public feeling and in the best features of British social democracy. What they also reveal is his vision of a very different kind of society from one founded on the self-seeking ethos created by neoliberalism and its retrograde social values. On available evidence, the British public, with 70 per cent willing to consider voting Labour, share that vision.

Crisis in U.S.-Pakistan Ties

noreply@blogger.com (Sravanthi) — Thu, 29 Sep 2011 07:05:00 +0530

The accusation by the United States that the Haqqani network is “a veritable arm” of the Inter-Services Intelligence seems to have hardly embarrassed Pakistan. Instead, following the pattern of defiance that it has shown since Osama bin Laden's killing, the Pakistan Army has made clear it will not subordinate its strategic interests to those of the U.S. But this new crisis in a rocky marriage may yet pass. The U.S. blames the Haqqani network, a faction of militants allied to the Afghan Taliban and based in the North Waziristan frontier region of Pakistan, for the recent attacks in Kabul. This includes the killing of former Afghan President Burhanuddin Rabbani and the attack on the U.S. Embassy some days before that. The July 2008 attack on the Indian Embassy in Kabul was also traced to the Haqqani network. Islamabad is correct in saying it was the CIA that nurtured Jalaluddin Haqqani — the leader from whom the group takes its name — during the anti-Soviet war in Afghanistan. But that is half the story. The Pakistan military's embrace of the CIA-Saudi-funded jihadists for its own goals in Afghanistan and against India is of no less relevance to the unending tragedy in the region. As the Pakistan security establishment prepares for the so-called end game in Afghanistan, it sees the Haqqani group as its best insurance policy against being sidelined — and importantly, against the rise of Indian influence over its western neighbour. The generals in Rawalpindi are confident that the superpower has no choice but to remain dependent on Pakistan to ensure a semblance of peace in Afghanistan and, by extension, in the whole region.Foreign Minister Hina Rabbani Khar's articulation of the message that the U.S. risks losing an ally with its allegations shows that even if the civilian dispensation is at variance with the security establishment, its political space is limited. Rightfully, the All Parties' Conference called by Prime Minister Syed Yousuf Raza Gilani should question the army's continuing links with militants and the internal risk this poses. But the track record of such initiatives, undertaken each time the Pakistan Army finds itself in hot water, shows that they end up endorsing the security establishment and its misguided strategies. Pakistan's ability to stand up to a superpower patron would have been admirable were its agenda clean. All this might be a source of anxiety to India, which depends to an extent on Pakistan's influential allies to force it to rein in groups such as Lashkar-e-Taiba. Even so, New Delhi must work to discourage any precipitate action by Washington against Pakistan that may put the entire region at risk.

Valuing biodiversity

noreply@blogger.com (Sravanthi) — Wed, 28 Sep 2011 07:48:00 +0530

Countries endowed with genetic resources contained in rich flora and fauna will welcome the addition of 19 party-signatories to the Nagoya Protocol, which forms part of the UN Convention on Biological Diversity. India has been a votary of the accord, which aims at promoting fair and equitable sharing of benefits arising from the use of genetic resources, and informed, agreed terms of access to such wealth. The protocol also applies to traditional knowledge associated with genetic resources and the benefits flowing from their use. What is important is that the 61 countries that have signed on so far, and others that may follow, must ratify the text of the Convention, for it to enter into force. Once operationalised, it will provide a framework for the drafting of domestic laws in member states. Such legislation is necessary to ensure the transfer of benefits to communities that have nurtured natural resources. India has launched a domestic process under the Biological Diversity Act to document, regulate, and manage its genetic resources. But it has a long way to go in creating comprehensive documentation and involving local communities as stakeholders.The Nagoya Protocol assumes importance in a globalised era of intensive exploitation of natural resources for commerce. Several requests are made to governments for the transfer of genetic resources abroad for research. Often these efforts are sponsored by corporates, particularly in the area of plant genetics for agriculture. It is vital that India strengthens its regime of access and benefit-sharing in such a scenario, a goal that can be aided by the Nagoya Protocol. What must be emphasised here is the importance of protecting the rights of farmers and traditional communities to extant natural resources, avoidance of restrictive patent regimes in agriculture, and the equitable sharing of proceeds of beneficial research. The danger of allowing one-sided commercial exploitation of genetic resources, such as pathogens for vaccine production, was underscored last year by Union Minister Jairam Ramesh who was holding the Environment portfolio at the time. This would merely aid for-profit activities at the cost of the host nation. India, which is scheduled to host the UN Biodiversity summit in 2012, must persuade all industrialised nations, which have a major stake in the plant and other genetic resources of the world, to ratify the Nagoya Protocol and make it a meaningful international instrument. Here is an unprecedented opportunity for all countries to begin to assign value to their natural capital, and work for the protection of mountains, forests, wetlands, birds, animals, and even lesser forms of life.

Saudi women gain little

noreply@blogger.com (Sravanthi) — Wed, 28 Sep 2011 07:47:00 +0530

King Abdullah of Saudi Arabia has stirred interest with his September 25 announcement that women would have the right to vote in future municipal elections and would be able to contest as well. Women are also to have seats in the Majlis Al-Shura, the body consulted by the King on a range of public policy issues. The new law is to take effect in the 2015 municipal polls. Campaigners have attributed the King's move to the courage of Saudi women themselves, to Saudi social media, and to the effect of the continuing popular uprisings across West Asia and North Africa. In fact, this modest extension of the franchise to women will be in accordance with a law made in 2005 but never implemented. One of the stated reasons for non-implementation was that there would be problems in running segregated polling booths. In any case, the 2008 elections were postponed to 2009 and then did not take place at all. This time, the Majlis itself seems to have played a part by reviving the issue of women's suffrage. While it has always been able to summon officials and request access to official documents, its powers have been gradually extended, and it can now propose and amend legislation without the ruler's prior approval.The King's announcement might be viewed as an overdue recognition of what should be treated as an inalienable human right — but the move is not all it might appear to be. The hardline Salafist clergy who form the country's ulema have, according to the ruler, endorsed this limited form of women's suffrage. The clerics have little to fear at present. The municipal councils are virtually powerless, and even if women can stand for office they will find it extremely difficult to campaign or even to get to the polling stations (as they are banned from driving, not by any written law but by a fatwa). As for the Majlis, it is in no sense a representative assembly, as it is appointed by the King. In contrast, challenges to the driving ban have provoked far stronger reactions, with several women being stopped and questioned; some, clearly under duress, have signed promises not to drive again. The clergy's differing reactions to the issues expose the mutual dependence of the hard-boiled clerics and the royal family. The former, who are suspicious of the more liberal royals, provide the House of Saud with spiritual legitimation in a deeply conservative society. The latter ruthlessly suppress any expression of ideas that implies a departure from Salafist orthodoxy. The two dominant Saudi Arabian institutions evidently fear democracy and equality even more than they fear women at the wheel.

A Malady, Not a Crime

noreply@blogger.com (Sravanthi) — Tue, 27 Sep 2011 07:17:00 +0530

Are people who attempt to put an end to their lives criminals? Yes, says Section 309 of the Indian Penal Code 1860, condemning “whoever attempts to commit suicide” to “simple imprisonment for a term which may extend to one year, or with fine, or with both.” The obsolete provision flies in the face of modern and humane approaches to suicidal behaviour, which regard those who suffer from this malady as people in need of care, support, and rehabilitation. We now know that suicidal behaviour is determined by a complex matrix of factors including personal experiences, psychological history, the socio-cultural environment, and genetic make-up. The central government's decision to initiate steps to delete Section 309 is certainly overdue. The Law Commission of India recommended its repeal as early as 1971 and, once again, called for decriminalising the attempt to suicide in its 210th report in 2008. As it pointed out, this inhumane provision, which is a form of double punishment, remains on the statute books only in a few countries such as Pakistan, Bangladesh, Malaysia, and Singapore, besides India. The view that decriminalising the attempt to suicide will encourage people to take their own lives has no basis. As the International Association for Suicide Prevention has pointed out, there is nothing to show that suicide rates have increased following decriminalisation; in fact, the converse may well be true as decreasing suicide rates in some countries can be related to the medical and psychological help people who attempt suicide turn to in the absence of fear of being penalised by the law.It is important to stress here that deleting Section 309 does not absolve the state, public authorities, and society at large of the responsibility to prevent suicides. It is the duty of the state to protect and preserve human life, and it can be argued that Section 306 of the IPC, which penalises the abetment of suicide, casts an obligation on public authorities to prevent the loss of life that may result from such acts as fast-unto-death. Upholding the constitutionality of Section 306, the Supreme Court of India observed it was a distinct provision that existed independently of Section 309 (Gian Kaur v. State of Punjab, 1996). In the United Kingdom, the last European country to decriminalise the attempt to suicide, the Suicide Act of 1961 holds people criminally liable for aiding, abetting, and counselling the suicide of another. Decriminalisation is a recognition that suicide is a complex problem with psychological and social dimensions. As the Supreme Court observed, it is decidedly not a manifestation of a base criminal instinct.

The Rupee Under Pressure

noreply@blogger.com (Sravanthi) — Tue, 27 Sep 2011 07:16:00 +0530

Amidst the turmoil in the stock markets, one might choose to underrate or even ignore the significance of the sudden volatility in India's foreign exchange markets. That would be unfortunate. The rupee's steep fall against the dollar, after a fairly long period of stability, is a development that has major implications not just for exporters and importers but for the macroeconomy. The sharp declines in both the stock markets and in the rupee's external value, interrelated as they are, have some common features. With the global economy pushed to the brink by the persisting sovereign debt crisis in the euro zone countries, the uncertainty in the global financial markets increased as a natural consequence. Last week, there was a huge sell-off in the stock markets around the world, including India. At the global level, there is a strong demand for dollars as a safe haven. Ironically, all the troubles the United States is facing — a sharply lower-than-expected economic growth, persistently high unemployment, and fractious politics — have not dimmed the lustre of the American currency. Heightened risk-aversion, which is a direct consequence of the global crisis, has caused investors to liquidate their assets in what they perceive to be riskier markets and repatriate the money to safer destinations. Consequently, the demand for the dollar from exiting foreign institutional investors has risen in India, pushing up its price. In times of great uncertainty as now, it is not the prospect of better return but safety that drives investment decisions.On Monday, the rupee traded around Rs.49.60 to the dollar, perilously close to the psychologically important Rs.50 mark. In the current phase of rupee depreciation, the RBI does not appear to have intervened aggressively, possibly because it wants to conserve its firepower for a future contingency. The foreign currency reserves at around $318 billion may be comfortable, but not sufficient for a long-drawn campaign of intervention. Besides, the negative sentiment is driven entirely by global factors over which the RBI has no control. Also, the growing dependence on short-term flows and the widening current account deficit might neutralise the impact of intervention. As a rule, a depreciating rupee is good for exporters. But this time, the swing is so sudden and sharp that the exporters were, probably, caught off-guard. In any case, many of them would have hedged their positions. These explain why there has not been an adequate supply of dollars in the domestic market. But the truth is that exporters, like importers, prefer stability in exchange rates. The chances are that exchange rate management will be more challenging in the days to come.

Shaming numbers

noreply@blogger.com (Sravanthi) — Mon, 26 Sep 2011 05:46:00 +0530

Among the many forms of gender inequality, perhaps the most insidious is the one related to the sex ratio. India ranks high among countries having an adverse sex ratio, with fewer women than men. The 2011 Census revealed a small improvement in the overall sex ratio, from 932.91 females for every 1000 males (in 2001) to 940.27, but a steep fall in ratio for the 0-6 age group, from 927.31 to 914.23. Now the World Bank’s ‘World Development Report 2012’ has come up with more shaming numbers. After China, India has the highest number of “missing girls” at birth, that is, the numbers that should have been born in keeping with the average world sex ratio at birth. It is small consolation that in India, the number of girls missing at age zero has come down marginally since 1990. The report, titled ‘Gender Equality and Development,’ notes that were it not for these two countries, an additional 1.2 million girls would have been born in the world (1 million in China alone). In both countries, the son preference — a clear cultural preference for boys — combining with the easy availability of technology to discover the sex of the foetus has resulted in sex-selective abortions, a phenomenon Nobel Laureate Amartya Sen terms “natal inequality.” The high numbers in India show that attempts to tackle female foeticide through a ban on sex-determination tests, imposed under the Pre-Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, have been largely ineffective.China and India also account for the highest excess female mortality after birth, that is, the numbers of girls and women who die prematurely. The disproportionate mortality of girls during infancy and early childhood is the result of discrimination and a lack of access to water, sanitation, and health facilities. In India and some other countries, complications of pregnancy and childbirth are the cause of excess deaths of women in the reproductive age. The World Bank report makes the telling point that “despite stellar economic growth in recent years, maternal mortality [in India] is almost six times the rate in Sri Lanka.” On the other hand, in sub-Saharan Africa, which accounts for 1.1 million missing women — a majority of them in the reproductive age group — the report notes the “dramatic” impact of HIV/AIDS on the increase from about 639,000 in 1990. From these and other numbers presented by the report, it is clear that, while more women are getting educated and entering the labour force, the gender gap stubbornly persists in vital domains. These gaps cannot be addressed unless it is first realised that gender inequality is not a women’s issue — and that it affects the well being of both men and women.

The Arab League Resurfaces

noreply@blogger.com (Sravanthi) — Mon, 26 Sep 2011 05:44:00 +0530

Amid the West Asian and North African turmoil, the League of Arab States has begun to raise its profile, a development that bodes well for the whole region. Prompted by popular uprisings, by the Nato-inspired attempt at regime change in Libya, and by the brutalities governments in the region have inflicted on protesters, a committee of the Arab Parliament, to which the League's 22 members send representatives, has recently taken public positions on several key issues. It has proposed suspending Syria and Yemen for their failure to heed popular demands for reform and for cracking down on democratic protests. Significantly, the League rules out any call for international intervention of the kind it opportunistically approved in Libya — where, without its agreement, the continuing episode of western military adventurism would have been extremely difficult in the first place. Tripoli, however, remains suspended from the Arab body.The League now appears to be transcending some of its constitutional constraints. It has no supranational powers or enforcement mechanisms to support its broad objective of improving coordination among members on a wide range of matters, including military ones, and it cannot override national sovereignty. As a result, rivalries and disagreements between member states, and external exploitation of these, have at times rendered the grouping almost impotent. It has also been criticised as a body that serves dictators and despots, not ordinary citizens. In 2008, however, its Arab Charter on Human Rights, which is broadly consistent with other international rights instruments, came into force, and its recent expressions of concern over Syria and Yemen mark an important departure from its earlier silence on internal repression. The Arab League can become a genuine forum for the voices of the region's many peoples. Its potential for constructive engagement stands in contrast to that of the 57-member Organization of Islamic Cooperation (OIC), which bases its own Declaration on Human Rights in Islam on the Sharia law and has only just abandoned a 12-year campaign to have what it called the “defamation of religions” incorporated into international human rights law. The League now has a chance to widen and deepen its forward-looking concerns — and to remind member-governments that progress towards democracy founded on the protection of human rights is a key element in political stability. That, in turn, will give greater weight to its members' calls for the creation of a Palestinian state. In sum, the Arab League's enhanced standing must be welcomed as a positive factor for the region and the world.

IMF's dire warning

noreply@blogger.com (Sravanthi) — Sat, 24 Sep 2011 09:11:00 +0530

The International Monetary Fund has a creditable record of spotting, and tracking, world economic recovery more accurately than most other global institutions. As such its prognosis has always been keenly watched. Hence its warning, first issued while launching the latest edition of the World Economic Outlook on Tuesday and repeated on at least three different occasions, that the global economy was in “the danger zone” ought not to be treated as a hyperbole. The onus of taking corrective measures is squarely on politicians round the globe, and not just on those in the United States who have displayed an amazing disharmony in sorting out key economic issues. As Indian experience too demonstrates, a fiscal policy that is dictated by political considerations cannot complement the monetary policy adequately to achieve key objectives, such as reining in inflation. The global growth forecast for 2011 has been marked down to 4 per cent from 4.3 per cent. That small decrease in percentage terms, however, does not fully reflect the fears and forebodings of the IMF, which stand reinforced by its Global Financial Stability Report (GFSR), released almost simultaneously with the WEO. The report serves as an early warning system and recommends policy action to stave off a crisis.There are ample reasons for policymakers of both the developed and the developing countries to worry, as risks of financial instability have increased significantly in the past few months. The global financial crisis that began with the U.S. sub-prime loans and then morphed into a systemic banking problem with international implications is far from being resolved. The sovereign debt crisis in the euro zone countries represented the next stage. Now, there is a political phase where a consensus on fiscal consolidation and adjustment has been eluding the politicians on both sides of the Atlantic. As part of a three-pronged action plan for the developed countries, the IMF has called for a credible, medium-term fiscal adjustment plan. The U.S. should take steps to resolve the problem of overstretched household balance sheets through an aggressive restructuring programme. Thirdly, the banking sector in Europe should be fixed immediately, if necessary through infusion of capital. Developing countries need to avoid a further build-up of financial imbalances. In words that seem prophetic, the IMF has cautioned that countries such as India will face a sudden reversal of capital flows if foreign investors see their growth prospects petering out. In the post-crisis period, country risk assessments have become more important than interest differentials.

AIDS vaccine: a ray of hope

noreply@blogger.com (Sravanthi) — Sat, 24 Sep 2011 09:10:00 +0530

The search for an effective AIDS vaccine began a quarter-century ago and after a series of failures, there finally appears some reason to cheer. The first signs of success are beginning to emerge, ironically, from a trial (RV144) that seemed destined to flop. The two vaccine candidates — ALVAC-HIV and AIDSVAX — used in the prime-boost trial conducted in Thailand from 2003 to 2009 failed in their prime objectives when each vaccine was tested individually. However, the trial, which involved more than 16,000 healthy volunteers, showed a statistically significant protection rate of 31 per cent in one of the three analyses performed. Further analysis of the trial data has revealed something more interesting. During an AIDS Vaccine Conference held recently in Bangkok, scientists reported the discovery of molecular clues that might have played a crucial role in the vaccine’s performance. Forty-one volunteers who received the vaccine and contracted HIV, and 205 others who received the vaccine but did not get infected with the virus, were chosen for some detailed investigations. Much to their surprise, the scientists found distinct antibodies that provided protection against or made the volunteers vulnerable to HIV infection. A Y-shaped immune molecule called an immunoglobulin G (IgG) was found in the blood of those who were not infected. It turned out that this molecule had the ability to recognise a particular portion of HIV’s outer covering and hence was able to confer better protection. On the other hand, another antibody (IgA) that recognised different portions of the HIV’s outer covering made people more susceptible. According to Nature, these people were 54 per cent more likely to become infected than those who did not have this antibody.This is the first time a clinical trial has provided interesting leads that hold the promise of advancing AIDS vaccine research. Scientists are already planning animal studies to test the effectiveness of these antibodies. Three human trials using the same vaccines are also likely to start on a small scale in Thailand next year. The results from such studies may tell us if the antibodies caused the protection against HIV or if other factors played a role. But one thing is certain — the outer covering that conferred protection will become one of the most studied aspects of the virus. Only further trials in different populations can ascertain if the antibodies will be able to confer the same level of protection when used in other HIV vaccines and against other HIV strains. There is a ray of hope, but the need to temper optimism with caution stands out in a field littered with failures and disappointments.

Another assassination

noreply@blogger.com (Sravanthi) — Thu, 22 Sep 2011 11:37:00 +0530

The assassination of Burhanuddin Rabbani, former President of Afghanistan and the head of the High Peace Council that is leading reconciliation efforts with the Taliban, has underlined that the prospects of peace in that long-suffering land remain remote. The manner of the killing, by a trusted visitor carrying a bomb in his turban, has an eerie resemblance to the assassination of Ahmed Shah Massoud of the Northern Alliance 10 years ago. Two men posing as television journalists killed the “Lion of Panjshir” two days before al-Qaeda carried out its horrific attacks on the New York Twin Towers. It was clearly a pre-emptive move to neutralise the Northern Alliance and deny the U.S. a strong ally on the ground in the military retaliation that would follow the 9/11 attacks. Rabbani's assassination is the most significant political killing since that of Massoud. With the Taliban and the Pakistan-based Haqqani network emerging as prime suspects, it is a massive setback to the peace process. An ethnic Tajik who headed the fragile and embattled Afghan government between 1992 and 1996, Rabbani was a hated figure for the Taliban. The feeling was mutual, but he had thrown himself into the efforts by the U.S. and President Hamid Karzai to bring the militants to the negotiating table. Only in June, Rabbani declared that the HPC's efforts had led to a breakthrough in contacts with the Haqqani network and the Quetta Shura. Even Mullah Omar, the Taliban supremo, made some interested noises. The 71-year-old Rabbani was also making overtures to Pakistan in an attempt to repair relations that had soured in the 1990s. The assassination revives doubts about the assumption that some Taliban are ready to do a deal with Washington.Rabbani himself was not entirely convinced about the reconciliation project. His participation was most likely driven by fears of being left out of any settlement in a post-U.S. scenario. Both the U.S. and President Karzai saw him as vital to the challenge of bringing non-Pashtun groups on board. This task is bound to get more complicated as non-Pashtuns are now likely to turn suspicious about Taliban intentions. For India, the killing means the loss of an ally. Coming barely a week after the Taliban attack on the U.S. Embassy, this terror strike in an area described as the “Green Zone” of Kabul also nails the U.S. claim, as it withdraws troops from Afghanistan, that western troops have succeeded in weakening the militants. The American envoy in Kabul brushed off last week's attack as mere “harassment,” saying the traffic congestion in the Afghan capital was now the bigger headache. If only that were true.

A necessary pause at Kudankulam

noreply@blogger.com (Sravanthi) — Thu, 22 Sep 2011 07:55:00 +0530

The response of the State and central governments to the snowballing protest against the Kudankulam Nuclear Power Project (KKNPP) has been marked by a sober realisation that popular fears over the safety of the nuclear plant cannot be ignored in the post-Fukushima era. Thanks to this attitude, the hundred-odd protesters who have been on an indefinite fast since September 11 are set to call off their agitation. The Tamil Nadu government has given them an assurance that its Cabinet would call for halting the project until the people's fears are allayed to their satisfaction. Chief Minister Jayalalithaa's letter drawing the Prime Minister's attention to the urgent need to allay apprehensions voiced by the people evoked an instant response. Dr. Manmohan Singh deputed Minister of State in his office, V. Narayanasamy, to meet the protesters at the venue of their fast in Tirunelveli district, and assure them that safety, rather than power generation, was the government's priority. Here is yet another opportunity for the Nuclear Power Corporation of India Ltd., which is implementing the project, to bring on board the public at large, especially the local communities whose apprehensions have been compounded by fears stoked by traditional opponents of nuclear power, and assure the country of the safety and reliability of the two Russian-made reactors. At the expert level, there has not been any doubt that the design of the two VVER-1000 state-of-the-art reactors installed at Kudankulam is safe but the message has to be taken to the masses.There is no reason, however, to believe that the AIADMK government is against the implementation of this long-delayed project that is expected to boost power generation in Tamil Nadu, which has been suffering from a serious power deficit. Post-Fukushima, it is unlikely that nuclear power projects anywhere in the world are going to enjoy unqualified support from local communities, unless all their concerns and fears are sincerely and transparently addressed. The nuclear establishment need not be dismayed by the obstacle thrown in its path just a few months before the KKNPP first unit was set to be commissioned. Instead, it should address the issue in a democratic manner and not let its traditional culture of non-transparency prevail. The bill introduced in Parliament to set up a Nuclear Safety Regulatory Authority has drawn sharp criticism on the ground that the new body will be captive to the government. Kudankulam offers India a new opportunity to meet the challenge of achieving the highest safety standards in the nuclear power sector — under the watch of a truly independent authority.

Commendable solidarity

noreply@blogger.com (Sravanthi) — Wed, 21 Sep 2011 07:32:00 +0530

The stereotype about wealthy Indians living in the Gulf countries is that they lead lavish, kitschy lives and build ostentatious houses back home. That is unfair. A group of Indians recently pooled in more than Rs.9 million (729,000 dirhams) to secure the release of 14 compatriots jailed in the United Arab Emirates for causing death without intention (for instance, in a road accident or at a work site). Even though these men had served out their jail terms, the local courts ruled that they would not be released until they paid the victim's family anywhere between 100,000 and 200,000 dirhams as diyat, or blood money. In Islamic law, such a payment is made in exchange for a pardon from the family members of the victim. But these men, employed as manual labourers or in other low-paying jobs, had no means to pay the amount laid down by the court. It is commendable that the Indian Community Welfare Committee, encouraged by the Indian Embassy, decided to reach out to these men. It also assisted in negotiating individual settlements, so that in some cases, the families of the victims were willing to accept less than the sum decreed by the court. In another case, an Indian hotelier in the UAE paid a diyat of 3.4 million dirhams to the family of a Pakistani man, leading to the release of 17 Indians who had been arrested for his murder in 2010. Amnesty International had taken up the cause of the 17 men, alleging torture in custody and denial of due process.A majority of the Indians who flock to West Asian countries are semi-skilled or skilled workers; they go in the hope that their earnings, considerably higher than the wages paid at home, will help the family they have left behind lead a better life. But working in a tough, alien environment, with its own set of rules, is not without hazards. Mistakes are bound to be committed, deliberately or unintentionally. Unscrupulous recruiters are known to fleece job-seekers and leave them stranded without travel documents or any other means to fend for themselves. When a worker finds himself in trouble with the local authorities, the sense of helplessness is acute due to the unfamiliarity with the environment and the language, and a lack of awareness about processes in that country and who to contact for help. The reflex is to look towards the Indian government for assistance. But there are limits to what a diplomatic mission can do to help in cases where the host country's criminal laws are involved. Influential members of the Indian community may be better placed to help in such situations, as the initiative in the UAE has shown.

No stopping the Palestinian tide

noreply@blogger.com (Sravanthi) — Wed, 21 Sep 2011 07:30:00 +0530

The Palestinian Authority (PA) President, Mahmoud Abbas, has exposed a mass of contradictions in the positions taken by Israel, the United States, and major European Union countries by announcing that on September 23 he would submit to Secretary-General Ban Ki-moon a letter requesting full United Nations membership for Palestine. The request will be based on the Palestinian borders as they obtained on June 4, 1967, that is, before the Six-Day War. The U.S. has already said it would veto the proposal in the Security Council, in which case Mr. Abbas will request the 193-member General Assembly to recognise Palestine as an observer state. While not amounting to full membership, that would mean a significant enhancement of Palestine's current “observer entity” status, which allows it only to maintain an observer mission at the world body. It would enable Palestine to bring actions in the International Criminal Court (ICC) and the International Court of Justice, and thereby call Israel to account for its conduct. Palestine would also be able to join a range of U.N. bodies, which it cannot do now.In reaction, Israel is maintaining its refusal to stop illegal construction in the West Bank and other occupied territories, and now hardliners are calling for it to withhold customs revenues which it collects on behalf of the PA and passes on. The Netanyahu government seems unable to see that Palestine as a full U.N. member would also be responsible for any attacks, say from Gaza, on Israel, and that starving the Palestinians will only embitter them further, with the likelihood that support for their elected representatives, Hamas, will grow. The U.S. Congress, for its part, has threatened to stop aid to the Palestinians, but that will damage Washington's already diminished standing in West Asia and North Africa even further. As for the Middle East Quartet (the European Union, the U.S., Russia, and the U.N.), its frantic efforts to revive Israeli-Palestinian talks reveal, in particular, a failure to accept that the 1993 Oslo accords are now a dead letter. With the exception of Russia, the governments involved are flying in the face of global public opinion. About 140 countries in the General Assembly support the PA application to the U.N. One poll puts public support for it in Britain, France, and Germany at 59, 69, and 71 per cent respectively. Even in the U.S., according to another poll, 45 per cent back the bid while only 36 per cent oppose it. Israel and its allies are both trying to deny the justice of the Palestinians' legitimate aspirations and to hold back an unstoppable tide.

Risky ways of global finance

noreply@blogger.com (Sravanthi) — Tue, 20 Sep 2011 06:54:00 +0530

The immense debacle in the international derivatives trading desk of a major Swiss bank in London has once again drawn attention to the risky ways of global finance. The facts of the case, as reported, conceal more than they reveal about the risk-rewards system in large international banks. A 31-year-old trader of Ghanaian origin allegedly indulged in fraudulent accounting practices and concealed trading losses while working at UBS, London, his actions dating back to 2008. When these were detected last week, the “rogue trader” was accused of blowing a $2 billion hole in the bank's balance sheet. It is incomprehensible how a single individual, however well placed, could escape scrutiny by his peers and superiors over such a long period. Nor is it clear as to how the Swiss Bank will refurbish its tattered reputation, although there is a widely-shared view that UBS is strong and resilient enough to withstand the staggering loss. As with such debacles, the post mortem in this case will lead to making promises to shareholders, depositors, and national regulators of better vigilance and internal audit. Important as these are, they will still not address the basic malaise of today's globalised, international banks.The globalisation of finance has altered traditional banking's core structure and values and that is why the latest dealing room debacle at UBS will have far wider ramifications. Banks traditionally do their best to match their assets and liabilities — to ensure that the money they borrow from depositors and markets matches the loans they issue. When there is a mismatch — the two could be in different currencies or at different maturities, for example — trouble often follows. Over the past few decades, global finance has been driven by an enormous mismatch between the two. Retail and private bank deposits from several countries have supported the expansion of leading banks into global markets. For all the benefits this meant for global trade and commerce, it resulted in a vast increase in risk-taking and a culture of paying extraordinary sums as bonus to managers that most outsiders find abhorrent. For its part, global financial regulation sought to put a lid on the quantum of bonus, hoping to reduce the levels of risk-taking by banks. But such efforts have not always been successful. The U.K.-based Independent Commission on Banking under Sir John Vickers has suggested the ring-fencing of the banks' retail operations to protect domestic deposits from being put at risk by the “casino” type culture of investment banks. That recommendation needs to be acted upon by other countries as well.

Living through earthquakes

noreply@blogger.com (Sravanthi) — Tue, 20 Sep 2011 06:52:00 +0530

As a natural calamity, powerful earthquakes are in a class of their own, able to strike without warning and capable of creating widespread devastation. So it was with the magnitude 6.8 temblor that struck near the Sikkim-Nepal border on Sunday evening. At least 66 people have been killed and many more injured in India as well as in neighbouring Nepal and Tibet, China. Buildings and roads in Sikkim have been badly damaged. Reports from Tibet speak of landslides disrupting traffic, power, and water supplies. Rain and landslides have hampered relief efforts, and the central government has sent in military and paramilitary units, along with aircraft and helicopters, to help the civilian authorities. Tremors from the quake, which could be felt hundreds of kilometres away, caused panic in many cities, including Kolkata, Patna, and Lucknow. In Delhi, which experienced a magnitude 4.2 earthquake near the Haryana border earlier this month, the latest episode left many with jangled nerves.This quake should serve as a wake-up call. Earthquakes don't kill people, buildings do, goes the old adage. But human-made structures — buildings, bridges, power plants and so forth — can be designed and constructed to withstand the sort of quakes that might hit a place. An earthquake quickly exposes failures in construction. Valuable infrastructure is destroyed and falling masonry can crush people to death. “In recent earthquakes, buildings have acted as weapons of mass destruction,” remarked one leading seismologist after the calamitous quake that hit the Caribbean island of Haiti in January 2010, killing tens of thousands of people. Poor quality construction on the island made the earthquake twice as lethal as any previous magnitude 7.0 event. As the crustal plate bearing India steadily pushes against the Eurasian plate, some experts fear that enough stress might have accumulated to unleash a great earthquake in parts of the Himalayas. Such a quake could have disastrous consequences across the highly populated Gangetic plain. Nor are places away from the plate boundary necessarily safe. The powerful quake at Bhuj in January 2001, for instance, claimed thousands of lives and caused havoc across a considerable area in Gujarat. Safety lies in ensuring quake-resistant construction. The Bureau of Indian Standards has laid out earthquake engineering codes for various structures. In addition, the Housing and Urban Development Corporation (HUDCO) and the Union Government's Building Materials & Technology Promotion Council have published guidelines and brochures on quake-safe construction. Turning a blind eye to such safety requirements will extract a heavy toll when an earthquake strikes.

Shockingly insensitive

noreply@blogger.com (Sravanthi) — Sat, 17 Sep 2011 06:14:00 +0530

Nothing is more reflective of the confusion and mix-up of priorities of the United Progressive Alliance government than the mismanagement of fuel pricing. While struggling to control inflation through monetary policy, the government sees no problem in allowing oil marketing companies to continually raise the price of petrol. The latest hike, by more than Rs.3 a litre, comes on top of the two substantial increases earlier this year. Although diesel price is still regulated, and remains unchanged for now, the repeated increases in the price of petrol have placed an enormous burden on the lower and middle income classes. The rationale for keeping the controls on diesel price is that any increase could affect agriculturists, freight carriers and public transport vehicles — but the unintended, and undeserved, beneficiaries of such a policy have been owners of high-end diesel cars and SUVs. On the other hand, owners of two-wheelers and small cars have borne the brunt of the escalating price of petrol. True, dual pricing for diesel is difficult to implement, but as suggested by the Centre for Science and Environment, other measures could be worked out to prevent misuse of the fuel by rich car-owners. What is clear is that the widening price gap between petrol and diesel has contributed to the rise in sales of diesel vehicles. According to CSE, diesel cars constitute 36 per cent of new car sales in India, and have disproportionately contributed to air pollution.While grappling with the hardships of high inflation, most evident in the sharp rises in the prices of essential commodities, India's middle classes cannot afford the ballooning of their household budgets on account of recurrent petrol price increases. Nor are the poor spared the indirect effects. Waiting in the wings is a proposal to limit the number of LPG cylinders supplied to households paying income tax to between four and six a year. Although a meeting of the Empowered Group of Ministers that was to decide this issue on Friday was deferred following open opposition from the Trinamool Congress and the Dravida Munnetra Kazhagam, indications are that the relief might be temporary. Political expediency, and not social commitment, seems to have stayed the hand of the government on this sensitive issue. Targeting subsidies is the name of the game, with the UPA government conveniently ignoring the fact that with social targeting, errors of exclusion are invariably high and the poorer and weaker sections often fall through the safety net. India still needs price controls on petroleum products if hundreds of millions of its vulnerable people are not to be exposed to sudden shocks.

Unrelenting focus

noreply@blogger.com (Sravanthi) — Sat, 17 Sep 2011 06:13:00 +0530

In hiking the policy repo rate by 0.25 percentage point on Friday, the Reserve Bank of India is once again reinforcing its past actions in moderating inflation and anchoring inflation expectations. This is in keeping with the trend that began in March 2010 and has, including the latest hike, taken the policy rate from 3.25 per cent to 8.25 per cent in 12 doses. Yet even such sustained monetary tightening has apparently not been enough. Inflation remains the dominant macroeconomic concern, with the wholesale price index (WPI) rising to 9.8 per cent in August, from 9.2 per cent in July. Inflation rate in non-food manufactured products rose from 7.5 per cent to 7.7 per cent during the same period, suggesting strong and persistent demand pressures. The hike in petrol prices by Rs.3.14 a litre, effected on the eve of the policy statement, will have a direct impact of 0.07 percentage point on the WPI, not to speak of the indirect impact that will be felt only after a lag. Various consumer price indices have risen in the range of 8.4 per cent to 9 per cent in July. Food inflation remains stubbornly high despite a normal monsoon. What is clear is that the high food prices are not a temporary phenomenon but the result of a structural imbalance in demand and supply. Viewed in whatever way, inflation and inflation expectations remain well above the RBI's comfort level.The official expectation is that inflation will start moderating, once the effects of past, cumulative action are felt. Any premature change in the monetary policy will be counter-productive and harden inflation expectations. The clamour for “a pause” in growth-inhibiting monetary tightening is countered by the argument that while growth has decelerated it has by no means collapsed. Indeed the GDP growth during the first quarter of 2011-12 at 7.7 per cent is only marginally lower than the previous quarter's 7.8 per cent. Besides, the RBI has conceded that a portion of the growth momentum will have to be sacrificed for the sake of price stability. The central government's finances have worsened during the first four months of the year. An even bigger worry comes from the developed world. The sovereign debt crisis in Europe is assuming menacing proportions. High unemployment and weak growth in the United States have prompted the authorities there to undertake some unconventional measures including an ultra-soft monetary policy. However, the weak demand from the developed world has not softened prices of commodities, including petroleum. As the volatile movements in the foreign exchange markets show, India has quite a task in managing its external economy in the face of mounting global uncertainty.

Funding health care

noreply@blogger.com (Sravanthi) — Fri, 16 Sep 2011 07:55:00 +0530

Rising India’s lack of progress towards provision of universal, equitable health care for its people is distressing. The sidelining of the Bhore Committee recommendations of 1946 — which relate to ways and means of building a public-funded allopathic health system for the entire population — indicates the low priority given to public health in policy. The consequence of this disastrous neglect is that Indians have among the highest out-of-pocket expenditures on health anywhere. The Planning Commission is now considering a universal health insurance scheme. The goal is laudable but the premise is wrong. As the workshop of the Kolkata Group chaired by Amartya Sen pointed out in February 2011, influential policymakers seem to think that private health care with proper subsidies or private health insurance subsidised by the state can meet the challenge. This is unlikely to happen because of the asymmetry of information between providers and users, and the absence of patient empowerment. Moreover, costs and quality of care are poorly regulated. If the central government is sincere about building a strong health care system during the 12th Five Year Plan (2012-17), it must accept the primacy of public-funded provision, invest heavily in both preventive and curative spheres, and introduce strong regulation.The High Level Expert Group on Universal Health Coverage headed by K. Srinath Reddy has the important task of prioritising the initiatives to be taken up during the 12th Plan. Universal health insurance is one stated goal. Here it is relevant to point out that some classes of citizens, such as children, the elderly, and women, can be comprehensively insured first. By focussing on these vulnerable groups, the National Rural Health Mission can take on an expanded role while new urban schemes can be launched to cut out-of-pocket expenditure substantially. There is also a felt need for oversight in the case of private health care providers. In the absence of benchmarking and scrutiny, hospital costs have hit patients hard. It is worth pointing out that the Affordable Care Act enacted last year in the United States emphasises patient rights through special provisions and mandates the spending of 85 per cent of large insurer premiums on actual care to prevent diversion to administrative overheads, salaries, and executive bonuses. Additionally in India, non-profit initiatives in health care can be invited to play a bigger role. Raising public expenditure on health to 2.5 per cent of GDP by the end of the 12th Plan will be a start; it needs to rise progressively. A cess to fund health care can scale up the effort rapidly.