Focus: The Chilling Truth Of 'Ice Cream Vs Frozen Dessert'

As a consumer, whether I am buying a shirt that claims to be linen, or whether it's a face cream, I like to know whether I am getting my money's worth. And it's no different when it comes to food.  So how do you think I felt when I got a carton of ice cream and in a small, inconspicuous corner, I see the label - frozen dessert. And it only got worse from there.

Today, in India, frozen dessert has taken over as much as 40% of the ice cream segment. Is that such a bad thing?

Herd panic pushing bourse bounces

By M H Ahsan & Yuang Chow Yo

Asia's stock markets are on a roller-coaster ride, last week dipping drastically on financial contagion fears about the faltering US subprime-mortgage market, and on Monday recovering strongly after the US Federal Reserve in a surprise move cut a key benchmark interest rate by 50 basis points. But are market forces reacting rationally to Asia's underlying profit and loss prospects?

Asian markets tumbled in near-unison last week, with some bourses notching single-day losses not seen since the September 11, 2001, terror attacks against the United States. On Friday, Japan's stock exchange recorded its largest one-day loss in more than seven years, shedding 5.5% of its value. The South Korean bourse recorded its worst performance ever last week over any given three-day period, shedding more than 200 points. On Friday, financial hub Hong Kong's exchange lost more than 6.5% of its total value, while Singapore's stock market dropped 6% on Friday.

Malaysia recorded its largest one-day loss ever, 5.3%, also on Friday. Thailand, Indonesia and the Philippines were similarly all hit hard last week, falling respectively by 6%, 13.5% and 12%. On Monday, regional markets bounced back to varying degrees, propelled up by Friday's sudden US interest-rate cut. Japanese stocks jumped 3%, Seoul's bourse was up 5.7%, and Hong Kong was up 3.6% in late trade. Singapore was up 5%, and other Southeast Asian markets also gained. So what happens next? Some financial analysts argue that the equity-market recovery is a knee-jerk reaction to the gains witnessed in the US on Friday, where the Federal Reserve's announcement drove up the Dow Jones main index by 1.8%.

The stock-market recovery, they say, also prices in widespread expectations of another 50-basis-point cut at the Federal Reserve's next monetary-policy meeting, scheduled for September. Yet if the US subprime-mortgage market continues its decline and begins to transmit financial contagion through the broad US housing market, where median prices appear to outpace widely individual borrowers' underlying earning power, the US economy could in a worst-case scenario slip into recession. Speculation is rife that the global financial order, now through financial liberalization measures more integrated than ever, could be on the brink of a crisis as big as or larger than that witnessed in the 1980s US savings-and-loan meltdown and the bursting of the technology bubble in 2001.

Significantly, last week's contagion effect on Asia's stock markets was driven more by panic selling than any new critical revelations about the region's economic and financial fundamentals. Until last week, Asia's stock markets and currencies had in general this year performed strongly. Apart from Singapore and pockets of China, Asian real estate is frothy but has not experienced the runaway price-inflation rates witnessed in US property markets. Relative to US and European banks and investment funds, regional financial institutions are believed to hold only small amounts of the derivative products that contain securitized subprime US housing loans.

Last week's financial turbulence in Asia was driven more by revised downward expectations that a slowing US economy would consume considerably less of the region's exports. All of Asia's major economies run big trade surpluses with the US. Southeast Asia's major trade-geared economies, including Thailand, Malaysia and Singapore, which export huge amounts of consumer electronics and their component parts to the US, are all exposed to shifts in US consumer sentiment. However, some regional economists argue that that basic analysis is simplistic.

Frederic Neumann, a Hong Kong-based economist at HSBC, argues in a recent research report that "the region has decoupled to a surprising degree from US demand conditions, and that even if the American economy were to slow down further, Asia could be only mildly affected". He argues that the region's "growth drivers" have become more balanced in recent years, with China and the European Union becoming more prominent, and that a deceleration in US economic growth will have a "less severe" impact on Asian than in the past. Recent HSBC sensitivity analysis shows that a 1% decline in US gross domestic product would have an equal or greater impact on only three Asian economies, namely Hong Kong, Singapore and Taiwan. The negative effect on China was surprisingly only 0.2% for each 1% decline in US growth.

At the same time, Asia's financial fundamentals are much improved from the last time financial contagion pummeled the region in 1997-98, hedging substantially the risk of a repeat broad-based economic meltdown. Central banks across the region have stockpiled unprecedented amounts of foreign-currency reserves to defend both their currencies and their banks from speculative offshore attacks. Although not universally, several countries in the region have also substantially improved their debt management, with governments reining in their public-debt profiles and corporations trimming the debt-to-equity ratios that left many of them vulnerable to the sudden shift in foreign-investor sentiment in 1997-98.

Many Asian governments are now in a financial position to prime the fiscal pumps of their economies if US growth and demand tail off significantly. While foreign money last week rushed out of regional bourses to cover subprime-mortgage-hit financial positions in the US, last week's capital flight could be a short-term phenomenon - even if the US slips into recession. Faced with tanking economic growth in the US, institutional money will inevitably seek out higher returns overseas. Asia's comparatively strong fundamentals and, in many business sectors, low price-to-equity ratios represent a natural counter-cyclical hedge against slowing US growth.

Representatives of big US-based hedge funds who before last week's turmoil met with Asia Times Online had been trolling Southeast Asia for undervalued stocks exposed to local consumption rather than global exports. To be sure, there are countervailing concerns that Asia's recent large balance-of-payments surpluses and subsequent buildup of foreign reserves have resulted in buoyant domestic money supplies. Regional central banks have to varying degrees of success attempted to sterilize those capital inflows to avoid a more rapid appreciation of their already rising currencies. Over the past year, domestic monetary aggregates, commonly known as M1 and M2, have soared across the region.

There are at least theoretical risks that, if mismanaged, sterilization of capital inflows could cause new inflationary pressures and asset price bubbles. Economists say that to date, neither is statistically apparent across most of Asia, nor were foreign-investor concerns over recent monetary interventions apparently a contributing factor to last week's financial turmoil. Indeed, HSBC's Neumann notes that in Asia over the past 15 years, there has been a weak empirical link between broad money-supply growth and stock prices. In Thailand and Japan, the relationship has historically been negative, while in Singapore, Malaysia and Pakistan the correlation is stronger but not significant. Neumann notes that in all major Asian markets, money-supply growth historically tends to lag rather than lead asset-price gains.

A recent Asian Development Bank report shows instead that the recent rise in Asian asset prices was driven more by capital inflows than domestic liquidity. Investor risk perceptions, however, are often more subjective than empirical, and herd behavior is still clearly the rule rather than the exception. As such, Asia could still be dragged down in tandem with a US slowdown, whether from underlying financial and economic measures the region deserves to be or not.

Special Report: The Echoing Silence Of Casteism In India

By Mir Barkat Shah | INNLIVE

Whenever the caste issue is raised, it is alleged that it is a nefarious design to divide an otherwise united Hindu community, and a problem that is internal to it. How is it a ‘Hindu problem’ when Islam, Christianity and Sikhism in India are equally bedevilled by it?

What then did you expect when you unbound the gag that had muted those black mouths? That they would chant your praises? Did you think that when those heads that our fathers had forcibly bowed down to the ground were raised again, you would find adoration in their eyes?

'THE RICH, THE CRIMINAL AND THE ILLETRATE'

By CJ Khaja Pasha in Bangalore

Three candidates in the forthcoming Assembly elections, one from the JD (S) and two from the BSR Congress, are illiterate. According to data released by Karnataka Election Watch (KEW) here on Monday, 16 candidates, including one from the Congress, two from the BJP, and four each from the JD (S) and KJP, are just about literate.

AAP Can Turn Out To Be The Game-Changer In Poll 2014

By Newscop | INNLIVE

ANALYSIS A group of activists that used to take up issues of public interest and worked mostly as pressure and interest groups had come together to form a party one day which transformed them from being activists to politicians!

The issue-specific workers now had bigger a aim to pursue a much clearer objective. The bunch of greenhorns, mostly young enthusiasts, aged between early 20s to late 30s, worked hard to make an indelible markon the political platform.

Pakistan Printing And Circulating 'Fake Indian Currency'

By Aniket Sahu / INN Live

Indian security agencies have known it for long. Several arrested underworld and terror operatives have confirmed it repeatedly. Now the National Investigation Agency (NIA) has nailed the Pakistan government's imprint on fake Indian currency notes (FICN) pumped into the country. This proof of counterfeit war can't be denied or erased.

One Year Of Modi Govt: Expectations Are Flying Very High

One year of Narendra Modi government: Jokes sometimes have a way of capturing truth more effectively than analysis.

Jokes sometimes have a way of capturing truth more effectively than analysis. The measure of the present government is captured by this one going around: What is the difference between the UPA and the NDA? In the UPA we had a government and no prime minister; in the NDA we have a prime minister and no government. This has an element of cruel exaggeration. But it highlights the central tension of one year of Narendra Modi’s government.

Now, For New 'Telangana State': No Constitutional Barriers

By M H Ahssan | INN Live

CONSTITUTIONAL ANALYSIS We must preserve the Union power to redraw State boundaries unfettered by new constitutional restraints as the flexibility to create suitable state-nation arrangement has sustained Indian federalism.

Now that the proposal for a new Telangana state has entered the legislative stage, in the State Assembly and subsequently Parliament, the constitutional question will take centre stage: does the absence of a supporting State Assembly resolution for the creation of a new Telangana state, an outcome which remains likely, render a parliamentary amendment unconstitutional? In this analysis I show that this constitutional question sits at the fault lines of two conflicting constitutional impulses on federalism in India: first, the imperative of crafting an accommodating state-nation and second, to guard against the excesses of venal partisan federalism. 

Searching for a Silver Lining

The current global slowdown will have a silver lining for India if this opportunity to enhance competitiveness is fully utilised by the industry and exportable products and export markets are diversified, says Abhijit Das

Riding on the back of brisk growth in the global economy since 2002, India’s exports have witnessed a phenomenal three-fold rise during the period 2002-03 and 2007-08. This powerful dynamo for employment generation is now threatened by the liquidity crunch and declining global demand. India needs to properly manage the fallout from the current global slowdown on its export sector in order to limit adverse consequences for the employment situation.

A quick analysis by Unctad-India shows that a 10% decline in overall exports of goods from the 2006-07 level would result in a direct and indirect loss in employment of 2.2 million man-years. Sectors which are likely to witness job losses include traditional export sectors such textiles and clothing, metal and metal products and miscellaneous manufacturing.

Two additional noteworthy points emerge from this analysis. First, the agriculture sector would not remain unaffected. In particular, the food crops sector is likely to see sharp loss in employment as it has a high employment multiplier and provides crucial inputs to exports of the processed food industry, which has emerged as a dynamic sector. Second, employment in certain sectors such as minerals may take a severe hit — although these sectors may not contribute directly to India’s export share. The lesson is clear — sectors which provide inputs to the exporting sectors and have high employment multipliers would also be adversely affected.

In order to sustain the export momentum and contain job losses, the central government has finalised an economic stimulus package comprising measures aimed at easing the liquidity crunch and providing enhanced incentives to exporters. While these measures may provide some relief to the exporters, the present crisis should be used as an opportunity to address more deep-seated problems by adopting suitable mitigation strategies for sustaining the export growth in the long term. Following suggestions could be considered.

Despite targeted efforts by the government for seeking new markets for India’s exports, the EU and US continue to be the main destination of India’s exports. These two main markets account for nearly onethird of India’s exports, although the share of the US in India’s exports has reduced gradually over the years. China, Japan, West Asia and Asean provide viable and sustainable alternate markets for reducing India’s overwhelming reliance on the EU and US for its exports. Early conclusion and implementation of free trade agreement negotiations with some of these countries could provide India with attractive markets for reducing the risk of overall exports being adversely affected by developments in a few big markets.

Although the composition of India’s export basket has shown some changes over the past five years, this has been mainly due to the rise in exports of petroproducts. Given the sector’s capital-intensive nature, increased exports of petroproducts may not result in significant employment generation. Textiles and apparel, leather products, gems and jewellery and handicrafts continue to be the significant export-oriented and employment-intensive sectors. A more focused effort is required for diversifying India’s export basket to other employment-intensive sectors. As a preliminary exercise, industry could identify products and seek markets in which India is globally competitive. As an illustration, exporting organic chemical and pharmaceutical products could be explored in Chinese and Asean markets.

Indian industry needs to formulate and implement appropriate strategies for becoming part of global supply chains. While the auto part sector provides success stories, there is a need to have a hard look at sectors such as electronic components so that India can gain from the increasingly fragmented nature of global supply chains. With profit margins shrinking globally, competitiveness would be the most important determinant for acquiring a share in export markets abroad. Experts feel India should take advantage of its strength in IT and use it extensively to upgrade manufacturing and thereby increase the competitiveness of India’s exports. While some of the industries are actively engaged in this effort on a regular basis, innovative solutions are required in sectors such as handicrafts for harnessing IT for improving product designs and enhancing exportability of the products.

The race for access to raw materials at competitive price has picked pace and would accelerate in the coming years. This would be an important determinant of cost competitiveness of exports. In India, the prices of some raw materials and industrial inputs such as copper and aluminium have been significantly higher than the London Metal Exchange price. For example, during the period 2000–06 the difference between the price of copper in India and the LME price was in the range of 34% to 83%. However access to natural resources at competitive prices is often stymied by a myriad of complex rules and dual pricing endowed with the natural resource. Not much headway has been made on this issue in the Doha trade negotiations. As an alternative to direct imports of natural resources, some of the Indian enterprises could explore the possibility of outward FDI for accessing natural resources in foreign markets.

During periods of economic downturn many countries adopt protectionist trade measures such as imposing anti-dumping or countervailing duties on imports. Experience on this issue during the current economic downturn is not likely to be any different from the past. It needs to be recognised that India’s export incentives could be easily offset by the importing countries by imposing countervailing duties, as has happened in the past. This might render the new export incentives ineffective.

In order to sustain India’s export growth the need to preserve the existing market access in big economies becomes extremely important. While an early and satisfactory conclusion of the Doha Round would help in this regard, it is also essential to be vigilant that non-tariff measures do not act as a disguised trade restriction. India’s economic stimulus package might offer an immediate succour to the exporters. However, there is a need to develop and implement longterm measures that would ensure sustained export growth, which is not impeded by adverse developments in big foreign markets. The current global slowdown will have a silver lining if the opportunity offered to diversify exportable products and markets as also enhance competitiveness is fully utilised by the Indian industry.

Inside the mind of Rahul Gandhi

By M H Ahssan

Call it software politics. After buttons on the EVMs are pressed, data from the machines fed into the national network, votes dissected on 24x7 channels and the poll pundits proven wrong, the young man responsible for the grand old party’s near-decisive victory is sitting quietly on the backbench, showing no emotion.

He betrays neither the joy and relief of victory nor the strain of possible responsibilities in the future. The Cabinet position has been declined, at least for now. With the dust of the election battle settling, the party reins have been handed back to mother. So, what’s on Rahul Gandhi’s mind now? What has he been thinking the past couple of years, when he metamorphosed from dimpled poster-boy for dynasty to Congress’s campaigner-in-chief? How does he think?

Not politics so much perhaps, as management. Masters at Doon School, his father’s alma mater and his own from 1981 to 1983, remember him as a “quiet, shy boy”. One of the masters who tutored Rahul during his stay at the school’s Kashmir House recalls, “He left the school as quietly as he came. He was grandson of Prime Minister Indira Gandhi, but he rarely talked about politics.”

Rahul went on to St Stephen’s College in Delhi, Harvard, Rollins College in Florida and finally Trinity College. He collected many degrees along the way and perhaps a philosophy of management as well. It was at Harvard that he studied under Michael E Porter whose ‘Five Forces Analysis’ — a business development strategy — seems to have influenced Rahul in a big way. Porter’s model analyses the forces “that affect a company’s ability to serve its customers and make a profit”. The theory insists that if an industry is attractive, every firm doesn’t have the same profitability. “Some firms are able to apply their core competences, business model or network to achieve a profit above the industry average”. Replace Porter’s ‘industry’ with politics and ‘firms’ with parties and the analysis works well in the jumble of Indian coalition politics.

It probably helps that Rahul has been employed in something other than Indian politics. After his Cambridge M Phil, he worked as a consultant with Porter’s Monitor Group in London for three years. That was where he honed the management and analytical skills that people now say with post-election hindsight make him a good politician. But Sam Pitroda, his father’s old colleague and head of the Technology Mission predicted this when Rahul entered politics in 2004: “He has worked under Michael Porter for four years...Rahul is methodical, analytical, mature and sincere... He is extremely intelligent and at ease with cyber technology...”

Rahul’s buddies and aides say he has transferred his management skills to the Indian countryside in the year-and-a-half that he has been on a ‘Discovery of India’ tour. Jitin Prasada, Congress MP, says, “Rahul has an innate belief in the strength of rural India. When British foreign secretary was taken to Amethi, it was not as was charged by rivals to mock the poor, but it was to show the strength of rural India. He goes out to villages, connects with people and sees the reality himself. And then he analyses and conceives ideas through that first-hand experience, not by closed-door ideating in Delhi. That is his originality”.

Fawning politicians and pundits alike admit Rahul’s way of thinking is clear from all that he has done at the grassroots in Amethi. “He has a vision for the future. Rahul always thinks and talks in long terms,” says Kalyan Singh Gandhi, AICC member from Rae Bareli and long-standing family confidante. Singh describes Rahul’s management philosophy seen at first hand. He created a network of workers across Amethi — 16 blocks, 160 nyaya panchayats, 750 gram sabhas and a samooh pramukh for a cluster of 50 homes. “He organized a camp for all the workers and they were trained by top management experts from Mumbai and abroad on how to reach out to people. The samooh pramukhs are supposed to look after the people all the and take care of all their needs — from water to pension to help in marriages”.

Now, Rahul plans to replicate the Amethi model, where he has 9,000 active party workers, across the country. But some say the plan is merely a marketing strategy. “It’s really credible the way the Congress marketed itself in the past two years. But, it’s just marketing. Where are the results for the people?” says Ranjan Chaudhary, a Dalit and IIM-Lucknow graduate who quit his MNC job in Melbourne to join Rahul’s core team in 2004. “He has many good ideas but no clarity on how to go about it,” says Chaudhary, who left Rahul’s team last year and contested a UP seat as a BJP candidate. “He has no place for emotions. It’s only management”.

True or not, the management guru is reaping rich dividends.

The risks of buying talent

By Nandini Sharma

Buying talent is a complex process. An analysis on why organisations need to be cautious
For a knowledge-intensive industry like information technology, the ability to recruit, retain, motivate, and develop the people resources is the greatest competitive strength for any organisation.

Companies often resort to aggressive recruitment strategies to meet the demand for talent. Buying talent is a common phenomenon when organisations have to suddenly procure skill sets from the market in response to urgent business needs. The question is: does an organisation always get what it has paid for? The answer is as debatable as the issue whether it indicates lack of career roadmap for key positions within the organisation.

An organisation needs to buy talent when it is in an evolving stage. N Muralidharan, Managing Director & Vice-President, Jobstreet.com India, lists the three situations when such a need arises:

There is an expansion and urgency to hit the market soon and needs "ready-made" staff; "go to market" pressures. It is entering the business late and has no time for building talent from scratch, so poaching from competition is the best option. This, of course, comes at a price.

When internally an organisation does not have the kind of talent that it is looking for and there is an urgent need.
There are a few like Sadhana Somasekhar, Director and Chief Marketing Officer, Future Focus Infotech, who believe that most organisations with a mature recruitment/hiring model do not opt for the "buy" route. They attribute this to the organisation's business conduct or ethics, HR strategy and so on. However, at the grassroots level, the reasons that go against buy-outs appear to be the instability associated with such 'bought-out' resources, both with respect to the candidate and within the team. This also sets a precedence with new hires. Somasekhar adds that when there is a buy-out, it is often masked in the guise of a "joining bonus", which is in truth the reimbursement of the "short or no-notice" compensation borne by the candidate to his last employer.

Getting your money's worth
Buying talent is not as easy as buying a commodity, it is a complex process. An organisation does not always get its money's worth. It is in fact a two-way process. Muralidharan acknowledges that while the person hired could be appropriate, if the work related ambience and the product offering is not up to the mark, it may still not work. "To give an analogy, you might have a popular celebrity endorsing your product but if the offering is not appropriate the returns do not match expectation," he says.

Vikram Bhardwaj, Managing Consultant, Redileon executive search, insists that more than the monetary cost vs benefit comparisons, one has to view this more strategically—the opportunity or hidden costs need to be accounted for.

Talent that is procured directly from the market comes with proven experience, but is expected to differ from the organisation's own situation, requirement and culture. "Such cases will give rise to differentials in expectations and deliverables. What really rides the moment out is the maturity of the hiring organisation in recognising and expecting such events, and preparing to manage interests accordingly," says Monisha Advani, CEO, EmmayHR Services.

The risks involved
Buying talent is not as easy as it seems. There are many risks associated with the process. Advani lists a few key factors:

Price: You can land up paying over market indicators for a specific skill purely on the basis of a short-term analysis of your need to procure and land up with a long-term cost impact that can become difficult to sustain
Compensation expectations may change organisation or department wide on account of this external lateral introduction, leading to employee cost escalation.

Expectations and culture matching are perennial risks applicable to all employment engagement scenarios, only in this case, the cost impact tends to be higher. Culture mismatch is in fact one of the key problem areas, particularly at management levels.

Build or buy
The debate over building vs buying talent has been in existence for a long time. While buying talent has its just-in-time significance, from a long-term organisation development perspective building talent within the company has greater benefits. "The advantage of building talent is that it gives organisations the ability to mould skills the way they want it to be. The other factor is loyalty—you will have this pool locked in with the organisation for a longer period of time as compared to the ones that you buy. The chance that they share the long-term vision of the organisation is high. However, the downside is that there is a huge investment in terms of cost and time required to build talent. Then there is also this uncertainty of losing the talent after investing to build it," says Madan Padaki, Co-founder & Director, MeritTrac Services (a skills assessment company).

Lack of a career roadmap
It is believed that buying talent indicates a lack of career roadmap for key positions within the organisation. Experts are divided over this issue. Bhardwaj concedes that despite most companies progressively implementing robust performance-management systems, this always does not translate into effective career planning that lets people see and evaluate where they could go in their careers, which leads to attrition and then follows the urge to replace from outside since the company is also not clear as to who can take charge of the roles effectively.

There is also an interesting new development in the market. Explains Bhardwaj, "With the increasing business demand for a timely and consistent HR support, what used to be only the 'build' vs 'buy' decision has been expanded to include the 'build' vs 'buy' vs 'borrow' to include the option of temping.

The HR matrix and decision support mechanisms have evolved considerably to account for this change." The "build" vs "buy" phenomenon is all set for change with temping becoming the third alternative.

Herd panic pushing bourse bounces

By M H Ahsan & Yuang Chow Yo

Asia's stock markets are on a roller-coaster ride, last week dipping drastically on financial contagion fears about the faltering US subprime-mortgage market, and on Monday recovering strongly after the US Federal Reserve in a surprise move cut a key benchmark interest rate by 50 basis points. But are market forces reacting rationally to Asia's underlying profit and loss prospects?

Asian markets tumbled in near-unison last week, with some bourses notching single-day losses not seen since the September 11, 2001, terror attacks against the United States. On Friday, Japan's stock exchange recorded its largest one-day loss in more than seven years, shedding 5.5% of its value. The South Korean bourse recorded its worst performance ever last week over any given three-day period, shedding more than 200 points. On Friday, financial hub Hong Kong's exchange lost more than 6.5% of its total value, while Singapore's stock market dropped 6% on Friday.

Malaysia recorded its largest one-day loss ever, 5.3%, also on Friday. Thailand, Indonesia and the Philippines were similarly all hit hard last week, falling respectively by 6%, 13.5% and 12%. On Monday, regional markets bounced back to varying degrees, propelled up by Friday's sudden US interest-rate cut. Japanese stocks jumped 3%, Seoul's bourse was up 5.7%, and Hong Kong was up 3.6% in late trade. Singapore was up 5%, and other Southeast Asian markets also gained. So what happens next? Some financial analysts argue that the equity-market recovery is a knee-jerk reaction to the gains witnessed in the US on Friday, where the Federal Reserve's announcement drove up the Dow Jones main index by 1.8%.

The stock-market recovery, they say, also prices in widespread expectations of another 50-basis-point cut at the Federal Reserve's next monetary-policy meeting, scheduled for September. Yet if the US subprime-mortgage market continues its decline and begins to transmit financial contagion through the broad US housing market, where median prices appear to outpace widely individual borrowers' underlying earning power, the US economy could in a worst-case scenario slip into recession. Speculation is rife that the global financial order, now through financial liberalization measures more integrated than ever, could be on the brink of a crisis as big as or larger than that witnessed in the 1980s US savings-and-loan meltdown and the bursting of the technology bubble in 2001.

Significantly, last week's contagion effect on Asia's stock markets was driven more by panic selling than any new critical revelations about the region's economic and financial fundamentals. Until last week, Asia's stock markets and currencies had in general this year performed strongly. Apart from Singapore and pockets of China, Asian real estate is frothy but has not experienced the runaway price-inflation rates witnessed in US property markets. Relative to US and European banks and investment funds, regional financial institutions are believed to hold only small amounts of the derivative products that contain securitized subprime US housing loans.

Last week's financial turbulence in Asia was driven more by revised downward expectations that a slowing US economy would consume considerably less of the region's exports. All of Asia's major economies run big trade surpluses with the US. Southeast Asia's major trade-geared economies, including Thailand, Malaysia and Singapore, which export huge amounts of consumer electronics and their component parts to the US, are all exposed to shifts in US consumer sentiment. However, some regional economists argue that that basic analysis is simplistic.

Frederic Neumann, a Hong Kong-based economist at HSBC, argues in a recent research report that "the region has decoupled to a surprising degree from US demand conditions, and that even if the American economy were to slow down further, Asia could be only mildly affected". He argues that the region's "growth drivers" have become more balanced in recent years, with China and the European Union becoming more prominent, and that a deceleration in US economic growth will have a "less severe" impact on Asian than in the past. Recent HSBC sensitivity analysis shows that a 1% decline in US gross domestic product would have an equal or greater impact on only three Asian economies, namely Hong Kong, Singapore and Taiwan. The negative effect on China was surprisingly only 0.2% for each 1% decline in US growth.

At the same time, Asia's financial fundamentals are much improved from the last time financial contagion pummeled the region in 1997-98, hedging substantially the risk of a repeat broad-based economic meltdown. Central banks across the region have stockpiled unprecedented amounts of foreign-currency reserves to defend both their currencies and their banks from speculative offshore attacks. Although not universally, several countries in the region have also substantially improved their debt management, with governments reining in their public-debt profiles and corporations trimming the debt-to-equity ratios that left many of them vulnerable to the sudden shift in foreign-investor sentiment in 1997-98.

Many Asian governments are now in a financial position to prime the fiscal pumps of their economies if US growth and demand tail off significantly. While foreign money last week rushed out of regional bourses to cover subprime-mortgage-hit financial positions in the US, last week's capital flight could be a short-term phenomenon - even if the US slips into recession. Faced with tanking economic growth in the US, institutional money will inevitably seek out higher returns overseas. Asia's comparatively strong fundamentals and, in many business sectors, low price-to-equity ratios represent a natural counter-cyclical hedge against slowing US growth.

Representatives of big US-based hedge funds who before last week's turmoil met with Asia Times Online had been trolling Southeast Asia for undervalued stocks exposed to local consumption rather than global exports. To be sure, there are countervailing concerns that Asia's recent large balance-of-payments surpluses and subsequent buildup of foreign reserves have resulted in buoyant domestic money supplies. Regional central banks have to varying degrees of success attempted to sterilize those capital inflows to avoid a more rapid appreciation of their already rising currencies. Over the past year, domestic monetary aggregates, commonly known as M1 and M2, have soared across the region.

There are at least theoretical risks that, if mismanaged, sterilization of capital inflows could cause new inflationary pressures and asset price bubbles. Economists say that to date, neither is statistically apparent across most of Asia, nor were foreign-investor concerns over recent monetary interventions apparently a contributing factor to last week's financial turmoil. Indeed, HSBC's Neumann notes that in Asia over the past 15 years, there has been a weak empirical link between broad money-supply growth and stock prices. In Thailand and Japan, the relationship has historically been negative, while in Singapore, Malaysia and Pakistan the correlation is stronger but not significant. Neumann notes that in all major Asian markets, money-supply growth historically tends to lag rather than lead asset-price gains.

A recent Asian Development Bank report shows instead that the recent rise in Asian asset prices was driven more by capital inflows than domestic liquidity. Investor risk perceptions, however, are often more subjective than empirical, and herd behavior is still clearly the rule rather than the exception. As such, Asia could still be dragged down in tandem with a US slowdown, whether from underlying financial and economic measures the region deserves to be or not.

Special Report: The Shrinking Islands Of The World’s Largest Mangroves Have Triggered A Refugee Crisis

India is drastically losing land in the Sundarbans—a cluster of 54 islands in West Bengal—to climate change.

Recent satellite analysis by the Indian Space Research Organisation (ISRO) shows that in the last ten years, 3.7% of the mangrove and other forests in the Sundarbans have disappeared, along with 9,990 hectares of landmass, due to erosion.

The Sundarbans—a vast mangrove delta shared between India’s West Bengal and Bangladesh—is an immensely fragile ecosystem. One of the biggest threats, as it has turned out, is sea-level rise driven by climate change.

Polls 2014: Back To Basics For Congress And BJP

By Akshaya Mishra / Delhi

Election 2014 was supposed to be an unequal battle. Political observers had written off the possibility of a UPA comeback and the dice looked loaded in favour of the BJP-led NDA. The game has got even now.

Of course, back then nobody foresaw the implosion in the BJP and the NDA over the former’s decision to elevate Narendra Modi as the face of its election campaign. Everyone underestimated the power of the Congress’s survival instincts; some even predicted its death. Not many were willing to buy that Indian polity is no more about the Congress-BJP duality, but an arrangement of centrifugal forces whose support to national parties is more a matter of convenience than of compulsion.

Blowing the whistle on fake drugs

By Shabina Akhter

The government has decided to reward those who provide information on manufacturers and dealers of spurious drugs.

Have you encountered a drug that does not work, leading you to believe that it is fake? Or do you know of anyone who is engaged in the manufacture of spurious drugs? The Union health minister, Ghulam Nabi Azad, recently announced a “whistle blower policy”, aimed at encouraging the common man to provide information about the manufacture of fake drugs. The health ministry plans to give cash rewards to both the informer and the officer who seizes adulterated, spurious or misbranded drugs and cosmetics.

At present, based on the information gathered by the Central Drugs Standard Control Organisation, the office of the Drug Controller General of India raids places suspected of manufacturing or selling such drugs. The tip-off often comes from a member of the general public. The government hopes that a cash reward will lead to more people coming forward with such information.

The Indian Drug Manufacturers Association (IDMA) in Mumbai, which represents the interests of Indian (as opposed to foreign) drug manufacturers, is all praise for the whistle blower policy. “This policy is a timely one. The fact that it seeks to reward people for giving information on the manufacture and sale of spurious drugs is why the chances of it being successful are so high. If implemented properly, this policy will make it difficult for spurious drug makers to operate,” says Daara B. Patel, secretary-general of the IDMA.

According to the Drugs and Cosmetics Act, any drug that has been manufactured by compromising on its quality, or has been stored in such a way that it has lost its properties or has been tampered with or misbranded, is termed spurious. And according to the ministry of health, about five per cent of the drugs sold in the country is counterfeit and 0.3 per cent is spurious. Of course, it is not easy to tell a fake drug from a genuine one. “It’s very difficult to identify a spurious drug,” says T.R. Gopalakrishnan, advisor to the IDMA. “Only a series of chemical analysis can reveal a drug’s spurious nature. However, a case of misbranding can be easily identified,” he says.

One reason for the proliferation of spurious drugs in our country is that there are not enough drug inspectors who can keep a check on quality. “The acute shortage of drug inspectors makes it easier for dealers and manufacturers of spurious drugs to operate with impunity,” says Harinder Sikka, director of corporate affairs, Piramal Healthcare, the pharmaceutical company. “There’s just about one inspector for every 500 chemists in cities like Delhi. What’s more, only seven of the two dozen testing labs across India are functional. The rest of them, according to the Mashelkar Committee (which was set up to look into the drug patent laws in the country) report, are either shut or non operational,” he adds.

Besides, we do not even have an effective adverse drug reaction report system to monitor where and when patients are experiencing an adverse reaction to drugs. In some countries, it is mandatory for hospitals to report to a nodal agency if a patient has adverse reactions after taking a prescribed medicine. But that is not the case in India.

In such a scenario, offering rewards for tip-offs on spurious drugs may go some way in bringing the guilty to book. But experts point out that merely announcing a policy will not be enough. Says Sikka, “One of the major drawbacks of this policy is that people might try to make money out of it by making fictitious claims. Besides, the ministry is yet to decide on vital issues like how to implement the policy, who needs to be alerted and how it would go about protecting the identity of the whistle blower. It is only when the government takes strong measures to implement the policy that the consumer will benefit.”

People do have the option of going to the consumer courts in case they feel that they’ve been duped by fake drugs. “We do get a few consumer cases related to spurious drugs. At the moment we are fighting a case for a client who had bought an ayurvedic product that caused an allergy. Chemical analysis revealed that it had a high content of lead and mercury. The case will now be forwarded to the local food and drugs administration,” says Dr M.S. Kamath, medico-legal consultant and honorary secretary of Mumbai’s Consumer Guidance Society of India.

Since most of us will not be able to distinguish between real and fake drugs, experts advise that some basic rules be followed while buying drugs.

“Make sure that the seal, prints and hologram are genuine. If the prints are a bit blurred or fuzzy, refuse the medicine. But in case you want to lodge a complaint, buy a strip or a bottle of medicine and submit it to the office of the Drug Controller General of India or its zonal offices,” says Dr Kamath.

Under the Drugs and Cosmetics Act, the punishment for selling spurious drugs could be life imprisonment as well as a fine of Rs 10 lakh or three times the value of the confiscated goods, whichever is more.

If you are in doubt about the quality of the medicine you have purchased, “it’s best to go back to the doctor and show the medicines,” advises Dr Kamath.

However, sometimes doctors too are at a loss to know if a particular drug is fake or genuine. As Dr Chandra Kumar Behany, consultant gastro enterologist, Kothari Medical Centre, Calcutta, points out, “Many a time even doctors fail to distinguish between the two. At times both the packaging and printing of spurious drugs are impeccable.”

On the whole, the best bet for consumers would be to buy medicines from reputed shops and insist on a receipt, says Mumbai-based consumer activist Jehangir Gia.

And if you do catch on that you’ve been sold spurious drugs, you can always blow the whistle on the dealer and bring the culprit to book.

Searching for a Silver Lining

The current global slowdown will have a silver lining for India if this opportunity to enhance competitiveness is fully utilised by the industry and exportable products and export markets are diversified, says Abhijit Das

Riding on the back of brisk growth in the global economy since 2002, India’s exports have witnessed a phenomenal three-fold rise during the period 2002-03 and 2007-08. This powerful dynamo for employment generation is now threatened by the liquidity crunch and declining global demand. India needs to properly manage the fallout from the current global slowdown on its export sector in order to limit adverse consequences for the employment situation.

A quick analysis by Unctad-India shows that a 10% decline in overall exports of goods from the 2006-07 level would result in a direct and indirect loss in employment of 2.2 million man-years. Sectors which are likely to witness job losses include traditional export sectors such textiles and clothing, metal and metal products and miscellaneous manufacturing.

Two additional noteworthy points emerge from this analysis. First, the agriculture sector would not remain unaffected. In particular, the food crops sector is likely to see sharp loss in employment as it has a high employment multiplier and provides crucial inputs to exports of the processed food industry, which has emerged as a dynamic sector. Second, employment in certain sectors such as minerals may take a severe hit — although these sectors may not contribute directly to India’s export share. The lesson is clear — sectors which provide inputs to the exporting sectors and have high employment multipliers would also be adversely affected.

In order to sustain the export momentum and contain job losses, the central government has finalised an economic stimulus package comprising measures aimed at easing the liquidity crunch and providing enhanced incentives to exporters. While these measures may provide some relief to the exporters, the present crisis should be used as an opportunity to address more deep-seated problems by adopting suitable mitigation strategies for sustaining the export growth in the long term. Following suggestions could be considered.

Despite targeted efforts by the government for seeking new markets for India’s exports, the EU and US continue to be the main destination of India’s exports. These two main markets account for nearly onethird of India’s exports, although the share of the US in India’s exports has reduced gradually over the years. China, Japan, West Asia and Asean provide viable and sustainable alternate markets for reducing India’s overwhelming reliance on the EU and US for its exports. Early conclusion and implementation of free trade agreement negotiations with some of these countries could provide India with attractive markets for reducing the risk of overall exports being adversely affected by developments in a few big markets.

Although the composition of India’s export basket has shown some changes over the past five years, this has been mainly due to the rise in exports of petroproducts. Given the sector’s capital-intensive nature, increased exports of petroproducts may not result in significant employment generation. Textiles and apparel, leather products, gems and jewellery and handicrafts continue to be the significant export-oriented and employment-intensive sectors. A more focused effort is required for diversifying India’s export basket to other employment-intensive sectors. As a preliminary exercise, industry could identify products and seek markets in which India is globally competitive. As an illustration, exporting organic chemical and pharmaceutical products could be explored in Chinese and Asean markets.

Indian industry needs to formulate and implement appropriate strategies for becoming part of global supply chains. While the auto part sector provides success stories, there is a need to have a hard look at sectors such as electronic components so that India can gain from the increasingly fragmented nature of global supply chains. With profit margins shrinking globally, competitiveness would be the most important determinant for acquiring a share in export markets abroad. Experts feel India should take advantage of its strength in IT and use it extensively to upgrade manufacturing and thereby increase the competitiveness of India’s exports. While some of the industries are actively engaged in this effort on a regular basis, innovative solutions are required in sectors such as handicrafts for harnessing IT for improving product designs and enhancing exportability of the products.

The race for access to raw materials at competitive price has picked pace and would accelerate in the coming years. This would be an important determinant of cost competitiveness of exports. In India, the prices of some raw materials and industrial inputs such as copper and aluminium have been significantly higher than the London Metal Exchange price. For example, during the period 2000–06 the difference between the price of copper in India and the LME price was in the range of 34% to 83%. However access to natural resources at competitive prices is often stymied by a myriad of complex rules and dual pricing endowed with the natural resource. Not much headway has been made on this issue in the Doha trade negotiations. As an alternative to direct imports of natural resources, some of the Indian enterprises could explore the possibility of outward FDI for accessing natural resources in foreign markets.

During periods of economic downturn many countries adopt protectionist trade measures such as imposing anti-dumping or countervailing duties on imports. Experience on this issue during the current economic downturn is not likely to be any different from the past. It needs to be recognised that India’s export incentives could be easily offset by the importing countries by imposing countervailing duties, as has happened in the past. This might render the new export incentives ineffective.

In order to sustain India’s export growth the need to preserve the existing market access in big economies becomes extremely important. While an early and satisfactory conclusion of the Doha Round would help in this regard, it is also essential to be vigilant that non-tariff measures do not act as a disguised trade restriction. India’s economic stimulus package might offer an immediate succour to the exporters. However, there is a need to develop and implement longterm measures that would ensure sustained export growth, which is not impeded by adverse developments in big foreign markets. The current global slowdown will have a silver lining if the opportunity offered to diversify exportable products and markets as also enhance competitiveness is fully utilised by the Indian industry.

Searching for a Silver Lining

The current global slowdown will have a silver lining for India if this opportunity to enhance competitiveness is fully utilised by the industry and exportable products and export markets are diversified, says Abhijit Das

Riding on the back of brisk growth in the global economy since 2002, India’s exports have witnessed a phenomenal three-fold rise during the period 2002-03 and 2007-08. This powerful dynamo for employment generation is now threatened by the liquidity crunch and declining global demand. India needs to properly manage the fallout from the current global slowdown on its export sector in order to limit adverse consequences for the employment situation.

A quick analysis by Unctad-India shows that a 10% decline in overall exports of goods from the 2006-07 level would result in a direct and indirect loss in employment of 2.2 million man-years. Sectors which are likely to witness job losses include traditional export sectors such textiles and clothing, metal and metal products and miscellaneous manufacturing.

Two additional noteworthy points emerge from this analysis. First, the agriculture sector would not remain unaffected. In particular, the food crops sector is likely to see sharp loss in employment as it has a high employment multiplier and provides crucial inputs to exports of the processed food industry, which has emerged as a dynamic sector. Second, employment in certain sectors such as minerals may take a severe hit — although these sectors may not contribute directly to India’s export share. The lesson is clear — sectors which provide inputs to the exporting sectors and have high employment multipliers would also be adversely affected.

In order to sustain the export momentum and contain job losses, the central government has finalised an economic stimulus package comprising measures aimed at easing the liquidity crunch and providing enhanced incentives to exporters. While these measures may provide some relief to the exporters, the present crisis should be used as an opportunity to address more deep-seated problems by adopting suitable mitigation strategies for sustaining the export growth in the long term. Following suggestions could be considered.

Despite targeted efforts by the government for seeking new markets for India’s exports, the EU and US continue to be the main destination of India’s exports. These two main markets account for nearly onethird of India’s exports, although the share of the US in India’s exports has reduced gradually over the years. China, Japan, West Asia and Asean provide viable and sustainable alternate markets for reducing India’s overwhelming reliance on the EU and US for its exports. Early conclusion and implementation of free trade agreement negotiations with some of these countries could provide India with attractive markets for reducing the risk of overall exports being adversely affected by developments in a few big markets.

Although the composition of India’s export basket has shown some changes over the past five years, this has been mainly due to the rise in exports of petroproducts. Given the sector’s capital-intensive nature, increased exports of petroproducts may not result in significant employment generation. Textiles and apparel, leather products, gems and jewellery and handicrafts continue to be the significant export-oriented and employment-intensive sectors. A more focused effort is required for diversifying India’s export basket to other employment-intensive sectors. As a preliminary exercise, industry could identify products and seek markets in which India is globally competitive. As an illustration, exporting organic chemical and pharmaceutical products could be explored in Chinese and Asean markets.

Indian industry needs to formulate and implement appropriate strategies for becoming part of global supply chains. While the auto part sector provides success stories, there is a need to have a hard look at sectors such as electronic components so that India can gain from the increasingly fragmented nature of global supply chains. With profit margins shrinking globally, competitiveness would be the most important determinant for acquiring a share in export markets abroad. Experts feel India should take advantage of its strength in IT and use it extensively to upgrade manufacturing and thereby increase the competitiveness of India’s exports. While some of the industries are actively engaged in this effort on a regular basis, innovative solutions are required in sectors such as handicrafts for harnessing IT for improving product designs and enhancing exportability of the products.

The race for access to raw materials at competitive price has picked pace and would accelerate in the coming years. This would be an important determinant of cost competitiveness of exports. In India, the prices of some raw materials and industrial inputs such as copper and aluminium have been significantly higher than the London Metal Exchange price. For example, during the period 2000–06 the difference between the price of copper in India and the LME price was in the range of 34% to 83%. However access to natural resources at competitive prices is often stymied by a myriad of complex rules and dual pricing endowed with the natural resource. Not much headway has been made on this issue in the Doha trade negotiations. As an alternative to direct imports of natural resources, some of the Indian enterprises could explore the possibility of outward FDI for accessing natural resources in foreign markets.

During periods of economic downturn many countries adopt protectionist trade measures such as imposing anti-dumping or countervailing duties on imports. Experience on this issue during the current economic downturn is not likely to be any different from the past. It needs to be recognised that India’s export incentives could be easily offset by the importing countries by imposing countervailing duties, as has happened in the past. This might render the new export incentives ineffective.

In order to sustain India’s export growth the need to preserve the existing market access in big economies becomes extremely important. While an early and satisfactory conclusion of the Doha Round would help in this regard, it is also essential to be vigilant that non-tariff measures do not act as a disguised trade restriction. India’s economic stimulus package might offer an immediate succour to the exporters. However, there is a need to develop and implement longterm measures that would ensure sustained export growth, which is not impeded by adverse developments in big foreign markets. The current global slowdown will have a silver lining if the opportunity offered to diversify exportable products and markets as also enhance competitiveness is fully utilised by the Indian industry.

26/11 - 5th Anniversary: 'Crippled Investigations, Helpless Governance And Disgusting Leadership Makes Us Proud'

By Sridhar Acharya | Mumbai

Five years after 26/11, India’s intelligence services are functioning with staffing deficits of up to 40 per cent, highly placed government sources told INN Live. The Research and Analysis Wing (RAW), officials said, faces endemic shortages of personnel both with specialist language and area skills, and technology experts critical to modern espionage. The Intelligence Bureau (IB), in turn, has been unable to expand its counter-terrorism efforts, despite mounting threats.

“It is very sad we haven’t sorted out these problems in all these years,” says V. Balachandran, a former RAW officer who headed an official investigation into intelligence and police failures leading up to 26/11. “I fear we will pay for it dearly.”

Herd panic pushing bourse bounces

By M H Ahsan & Yuang Chow Yo

Asia's stock markets are on a roller-coaster ride, last week dipping drastically on financial contagion fears about the faltering US subprime-mortgage market, and on Monday recovering strongly after the US Federal Reserve in a surprise move cut a key benchmark interest rate by 50 basis points. But are market forces reacting rationally to Asia's underlying profit and loss prospects?

Asian markets tumbled in near-unison last week, with some bourses notching single-day losses not seen since the September 11, 2001, terror attacks against the United States. On Friday, Japan's stock exchange recorded its largest one-day loss in more than seven years, shedding 5.5% of its value. The South Korean bourse recorded its worst performance ever last week over any given three-day period, shedding more than 200 points. On Friday, financial hub Hong Kong's exchange lost more than 6.5% of its total value, while Singapore's stock market dropped 6% on Friday.

Malaysia recorded its largest one-day loss ever, 5.3%, also on Friday. Thailand, Indonesia and the Philippines were similarly all hit hard last week, falling respectively by 6%, 13.5% and 12%. On Monday, regional markets bounced back to varying degrees, propelled up by Friday's sudden US interest-rate cut. Japanese stocks jumped 3%, Seoul's bourse was up 5.7%, and Hong Kong was up 3.6% in late trade. Singapore was up 5%, and other Southeast Asian markets also gained. So what happens next? Some financial analysts argue that the equity-market recovery is a knee-jerk reaction to the gains witnessed in the US on Friday, where the Federal Reserve's announcement drove up the Dow Jones main index by 1.8%.

The stock-market recovery, they say, also prices in widespread expectations of another 50-basis-point cut at the Federal Reserve's next monetary-policy meeting, scheduled for September. Yet if the US subprime-mortgage market continues its decline and begins to transmit financial contagion through the broad US housing market, where median prices appear to outpace widely individual borrowers' underlying earning power, the US economy could in a worst-case scenario slip into recession. Speculation is rife that the global financial order, now through financial liberalization measures more integrated than ever, could be on the brink of a crisis as big as or larger than that witnessed in the 1980s US savings-and-loan meltdown and the bursting of the technology bubble in 2001.

Significantly, last week's contagion effect on Asia's stock markets was driven more by panic selling than any new critical revelations about the region's economic and financial fundamentals. Until last week, Asia's stock markets and currencies had in general this year performed strongly. Apart from Singapore and pockets of China, Asian real estate is frothy but has not experienced the runaway price-inflation rates witnessed in US property markets. Relative to US and European banks and investment funds, regional financial institutions are believed to hold only small amounts of the derivative products that contain securitized subprime US housing loans.

Last week's financial turbulence in Asia was driven more by revised downward expectations that a slowing US economy would consume considerably less of the region's exports. All of Asia's major economies run big trade surpluses with the US. Southeast Asia's major trade-geared economies, including Thailand, Malaysia and Singapore, which export huge amounts of consumer electronics and their component parts to the US, are all exposed to shifts in US consumer sentiment. However, some regional economists argue that that basic analysis is simplistic.

Frederic Neumann, a Hong Kong-based economist at HSBC, argues in a recent research report that "the region has decoupled to a surprising degree from US demand conditions, and that even if the American economy were to slow down further, Asia could be only mildly affected". He argues that the region's "growth drivers" have become more balanced in recent years, with China and the European Union becoming more prominent, and that a deceleration in US economic growth will have a "less severe" impact on Asian than in the past. Recent HSBC sensitivity analysis shows that a 1% decline in US gross domestic product would have an equal or greater impact on only three Asian economies, namely Hong Kong, Singapore and Taiwan. The negative effect on China was surprisingly only 0.2% for each 1% decline in US growth.

At the same time, Asia's financial fundamentals are much improved from the last time financial contagion pummeled the region in 1997-98, hedging substantially the risk of a repeat broad-based economic meltdown. Central banks across the region have stockpiled unprecedented amounts of foreign-currency reserves to defend both their currencies and their banks from speculative offshore attacks. Although not universally, several countries in the region have also substantially improved their debt management, with governments reining in their public-debt profiles and corporations trimming the debt-to-equity ratios that left many of them vulnerable to the sudden shift in foreign-investor sentiment in 1997-98.

Many Asian governments are now in a financial position to prime the fiscal pumps of their economies if US growth and demand tail off significantly. While foreign money last week rushed out of regional bourses to cover subprime-mortgage-hit financial positions in the US, last week's capital flight could be a short-term phenomenon - even if the US slips into recession. Faced with tanking economic growth in the US, institutional money will inevitably seek out higher returns overseas. Asia's comparatively strong fundamentals and, in many business sectors, low price-to-equity ratios represent a natural counter-cyclical hedge against slowing US growth.

Representatives of big US-based hedge funds who before last week's turmoil met with Asia Times Online had been trolling Southeast Asia for undervalued stocks exposed to local consumption rather than global exports. To be sure, there are countervailing concerns that Asia's recent large balance-of-payments surpluses and subsequent buildup of foreign reserves have resulted in buoyant domestic money supplies. Regional central banks have to varying degrees of success attempted to sterilize those capital inflows to avoid a more rapid appreciation of their already rising currencies. Over the past year, domestic monetary aggregates, commonly known as M1 and M2, have soared across the region.

There are at least theoretical risks that, if mismanaged, sterilization of capital inflows could cause new inflationary pressures and asset price bubbles. Economists say that to date, neither is statistically apparent across most of Asia, nor were foreign-investor concerns over recent monetary interventions apparently a contributing factor to last week's financial turmoil. Indeed, HSBC's Neumann notes that in Asia over the past 15 years, there has been a weak empirical link between broad money-supply growth and stock prices. In Thailand and Japan, the relationship has historically been negative, while in Singapore, Malaysia and Pakistan the correlation is stronger but not significant. Neumann notes that in all major Asian markets, money-supply growth historically tends to lag rather than lead asset-price gains.

A recent Asian Development Bank report shows instead that the recent rise in Asian asset prices was driven more by capital inflows than domestic liquidity. Investor risk perceptions, however, are often more subjective than empirical, and herd behavior is still clearly the rule rather than the exception. As such, Asia could still be dragged down in tandem with a US slowdown, whether from underlying financial and economic measures the region deserves to be or not.

Is Delhi Govt Prejudiced Against Differently-Abled Players?

By Siddhi Sharma | INNLIVE

The Constitution secures to the citizens, including the differently-abled, a right of justice, liberty of thought, expression, belief, faith and worship, equality of status and of opportunity and for the promotion of fraternity. But is this thought meant only to fill up pages of our constitution booklet ? Or does it hold some relevance and truth? Does our nation uphold its constitutional rights?

In an analysis done by INNLIVE, we have come across some shocking revelation . There are lots of voices , unheard. There are lots of sports people, falling in the category of the differently abled, who have made our nation proud, are suffering this bias. In such scenario, do we even have rights to call ourselves a citizen of a nation who believes in equality? When every ounce of the definition has been compromised?