Sunday, 20 December 2015

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18 Dec 2015 editorials

18 Dec 2015 

editorials


The Hindu:

Fed’s liftoff ends uncertainty


The U.S. Federal Reserve’s decision to finally start normalising interest rates, by raising the fed funds rate by one quarter of a percentage point, has emphatically ended the uncertainty over the direction the world’s largest economy is headed in. Seven years after the Fed embarked on its record monetary expansion — by beginning a programme of bond purchases and cutting its benchmark rate to near zero — to provide a stimulus in the wake of the 2008 financial crisis, the U.S. central bank has signalled that the American economy has definitely turned the corner. Fed chair Janet Yellen’s categorical assertion that the decision “reflects our confidence in the U.S. economy” and that the Federal Open Market Committee (FOMC) sees the economy on a path of sustainable improvement, should give comfort to investors worldwide that a key engine of the global economy is now ticking. Simultaneously, the Fed held forth the reassurance that its stance remains accommodative to support the recovery and help return inflation to the targeted level of 2 per cent. The widely anticipated decision should now infuse some much-needed optimism across both developed and emerging markets, especially at a time when global trade is stagnant and commodity prices continue to remain depressed as demand from China’s slowing economy stays muted. If history is any guide, previous tightening cycles from the Fed both in 1999 and in 2004 were coterminous with increased capital flows into emerging markets as economic growth in the U.S. spurred demand for goods and services in the developing and exporting nations. But conditions, as some economists point out, are different this time, with the majority of emerging market currencies more expensive than they were 11 years ago on an inflation-adjusted, trade-weighted basis. The immediate reaction in India’s markets was positive on Thursday as both stocks and the rupee ended stronger. And with adequate foreign exchange reserves accumulated as a bulwark against any sudden, sharp capital outflows, the Reserve Bank of India and Governor Raghuram Rajan — who had been calling for a gradual end to global easy money — appear well-prepared to deal with any exigencies, should they arise.

That the road ahead could still be anything but smooth and straight for both the global economy and the emerging markets is also amply evident in the language contained in the Fed’s communication. The FOMC statement made it clear that “economic conditions will evolve in a manner that will warrant only gradual increases” in the benchmark rate. This is shorthand for saying that interest rates are likely to inch up and over a longer duration rather than mount a well-spaced and clearly graded timetable of staircase steps. With China’s surprise yuan devaluation of August and the resultant turmoil still fresh in memory, Chinese policymakers, along with the monetary authorities in Japan, the United Kingdom and the European Union, would be closely tracked. For Indian companies, new overseas loans are likely to start getting costlier, and the appreciation of the dollar could roil corporate balance sheets as debt-servicing gets more expensive.


lift·off
Takeoff, especially the vertical takeoff of a rocket or helicopter.

em·phat·i·cal·ly
In a forceful way.

em·bark
Go on board a ship, aircraft, or other vehicle.
embark on
or
embark upon
to start a new project or activityusuallyone that will be difficult and will take time


stim·u·lus
A thing or event that evokes a specific functional reaction in an organ or tissue.

tick
(of a clock or other mechanical device) make regular short sharp sounds, typically one for every second of time that passes.

stag·nant
(of a body of water or the atmosphere of a confined space) having no current or flow and often having an unpleasant smell as a consequence

co·ter·mi·nous
Having the same boundaries or extent in space, time, or meaning.

spur
Urge (a horse) forward by digging one’s spurs into its sides.

bul·wark
A defensive wall.

ex·i·gen·cy
An urgent need or demand.

short·hand
A method of rapid writing by means of abbreviations and symbols, used especially for taking dictation. The major systems of shorthand are those devised in 1837 by Sir Isaac Pitman and in 1888 by John R. Gregg(1867–1948).

roil
Make (a liquid) turbid or muddy by disturbing the sediment.

tur·moil
A state of great disturbance, confusion, or uncertainty

The Hindu: December 18, 2015 00:52 IST

Inviting trouble in Kerala

Petty local rivalries have combined with national-level politicking to create an embarrassing situation for Kerala Chief Minister Oommen Chandy: after being invited to preside over a function where Prime Minister Narendra Modi was to unveil the statue of former Chief Minister R. Sankar, Mr. Chandy was asked to stay away by the organisers, who have formed an alliance with the Bharatiya Janata Party. Whether or not this was done at the behest of senior leaders of the BJP, it is clear that the organisers, the Sree Narayana Dharma Paripalana (SNDP) Yogam, a Hindu backward class outfit, will need to take a major part of the blame for putting the Kerala Chief Minister in an awkward position. But, neither the BJP nor the Prime Minister’s Office could have been unaware of the decision to keep the Chief Minister out. While the statue unveiling was a private function, and the Chief Minister was not required to be invited, it was highly improper to have asked Mr. Chandy to skip the function citing silly excuses after having first invited him. Both the SNDP and the Congress can lay claim to the political legacy of Sankar who served in leadership capacities in the two organisations. But with the SNDP moving towards the BJP, the fight for Sankar’s legacy seems to have got complicated in recent times. Over the days leading up to the unveiling of the statue, the Sangh Parivar had attempted to dig up information about Sankar’s links with the Rashtriya Swayamsevak Sangh in his formative years. Evidently, for both the SNDP and the BJP, to have a Congress Chief Minister preside over the function would have diminished the political dividends that could be expected from projecting Sankar as a Hindu, backward class Ezhava icon. Whatever the excuses given by SNDP leader Vellappally Natesan to Mr. Chandy, the fact remains that a Congress Chief Minister on the dais would have been politically inconvenient for the SNDP and the BJP.

Not surprisingly, the controversy saw both the Congress and the Left parties on the same side, with former Chief Minister V.S. Achuthanandan of the Communist Party of India (Marxist) describing the withdrawal of the invitation to Mr. Chandy as an insult to Kerala as a whole. Both formations have suffered erosion in their support base following the rise of the BJP in Kerala on the back of the growing influence of the RSS. The alliance with the SNDP has given the BJP greater reach ahead of next year’s Assembly election, and leaders of other parties have remarked that the SNDP is acting as a feeder organisation for the BJP. Without doubt, the SNDP-BJP alliance would see some social and political churning in Kerala. As it seeks to expand its base, the RSS-BJP combine is evidently moving beyond seeing the Left parties as the prime enemy. In the past, RSS sympathisers had overtly and covertly backed the Congress against the Left Democratic Front. That phase now seems to have ended.


pet·ty
Of little importance; trivial

pre·side
Be in the position of authority in a meeting or gathering.


un·veil
Remove a veil or covering from, especially uncover (a new monument or work of art) as part of a public ceremony.

be·hest
A person’s orders or command.


Business Standard

Dashing hopes


India’s merchandise trade numbers, which came out early this week, continued to be depressing. They offered no sign of a revival either in India’s domestic demand or in its export markets. Exports declined in November, for the twelfth successive month, by 24 per cent and imports too fell by a higher margin of 30 per cent. The trade deficit, expectedly, has shrunk by 40 per cent and has indeed seen a steady decline over the past few months. For the April-November period of 2015-16, the trade deficit is down to $87 billion, a drop of 15 per cent over the same months of 2014-15. This is the outcome of a worrying decline of 18 per cent in cumulative exports for this period and a drop of 17 per cent in cumulative imports.

These numbers may be reassuring for India’s balance of payments management in the current year – the current account deficit is likely to remain within one per cent of gross domestic product or GDP, which can be funded through total foreign investment flows with relative ease. But the underlying trends behind the foreign trade numbers for November are a cause for concern for the domestic economy. For instance, India’s non-oil, non-gold imports, which reflect domestic demand and the state of industrial recovery, fell by a whopping 27 per cent in November. In October, the import decline in this category was only half a per cent, reflecting perhaps the sharp recovery in industrial growth numbers for that month. If the sharp decline in November’s non-gold, non-oil imports is any indication, the prospects of a revival in domestic demand appear quite bleak. Whatever may be the benefits arising out of a fall in prices of oil and gold, a four per cent drop in non-gold, non-oil imports in the first eight months of the year does not augur well for the economy.

An equally worrying sign is the performance of India’s key export sectors. Engineering goods, gems and jewellery and textiles have seen declines ranging from 18 to 29 per cent. While weakness in global demand is certainly a major reason for this, the adverse impact on the employment market is likely to get worse over time. For India Inc, this would be one more pain point to deal with apart from the stress it is undergoing because of low earnings growth in the last few quarters. So far during the current year, a stable rupee even when the dollar has been gaining in strength has only made Indian manufacturers’ challenge in the exports markets even more daunting. In the last week, the rupee has depreciated a little, raising some hope for the beleaguered exports sector. That seems to be its only hope now, given the fact that India’s exports markets are yet to see any significant revival in demand and the government has made little effort in expediting either free trade agreements with its trading partners or stepping up initiatives for India to join the emerging trade arrangements that will bring under their ambit its traditional export markets. Without such policy support, India’s exports outlook appears as bleak as the November trade numbers have shown.

dash
Run or travel somewhere in a great hurry.

expectedly
In an expected way; predictably

cu·mu·la·tive
Increasing or increased in quantity, degree, or force by successive additions.

un·der·ly·ing
Present participle of underlie.

whop·ping
Very large.

bleak
(of an area of land) lacking vegetation and exposed to the elements.

au·gur
(of an event or circumstance) portend a good or bad outcome.

daunt·ing
Seeming difficult to deal with in anticipation; intimidating.

ex·pe·dite
Make (an action or process) happen sooner or be accomplished more quickly.

Indian Express

Governor’s overreach


Arunachal Pradesh is headed for a constitutional crisis, with the governor’s office accused of favouring the Congress’s rebel MLAs and the BJP in the state. Governor Jyoti Prasad Rajkhowa’s decision to advance the winter session of the assembly by a month and issue directions to vote on a resolution calling for the removal of the speaker at the first sitting of the House, with the deputy speaker in the chair, suggests a clear case of gubernatorial overreach.
The Gauhati High Court on Thursday suspended the governor’s directive until February 1, but his interventions have further muddied the troubled relations between the Congress and BJP. The Congress, which rules in Itanagar, disrupted the Rajya Sabha on Thursday, demanding the ouster of Governor Rajkhowa. A day earlier, party MPs led by Sonia Gandhi met President Pranab Mukherjee to complain about the governor’s actions and seek his intervention. That the governor, as the constitutional head of the state, is bound to act on the advice of the council of ministers, has been spelt out more than once by the Supreme Court. In Union of India vs Valluri Basavaiah Chaudhary (1979), a Constitution bench held that the governor is a “constitutional head of the state executive, and has, therefore to act on the advice of the council of ministers”. The governor has the power to summon, prorogue and dissolve the assembly under Article 174, but here again, the apex court has said that he is bound by the advice of the council of ministers.
This political crisis started with a rebellion in the Congress legislature party. A few rebel MLAs were suspended by the speaker. The governor should have stayed away from the chaos and waited for the Nabam Tuki government to take a floor test in the assembly, when the session convened on January 14. His decision to advance the session to December 16 without seeking the advice of the state cabinet, and pushing for a vote on the resolution to remove the speaker, has cost him the government’s trust. Yet, the governor’s seemingly partisan action does not justify the unbecoming spectacle of the government refusing to let the opposition into the assembly. There are clearly laid out procedures to test the majority of a government. Governor Rajkhowa, and Arunachal Pradesh’s legislators, need to follow them.


ac·cused
A person or group of people who are charged with or on trial for a crime.

gu·ber·na·to·ri·al
Of or relating to a state governor or the office of state governor.

o·ver·reach
Reach too far.

mud·dy
Cause to become covered in or full of mud.

pro·rogue
Discontinue a session of (a parliament or other legislative assembly) without dissolving it.

con·vene
Come or bring together for a meeting or activity; assemble.

The Guardian

view on fighting Isis: the opening of a Saudi front


Many questions hang over the announcement by Saudi Arabia that it will lead a 34-nation coalition against Islamic State. This comes, after all, more than a year after the US rallied more than 60 countries in a “global” effort to “degrade and defeat” the jihadi insurgency. Although there is some overlap between these two coalitions, Saudi has stressed the “Islamic” character of the alliance it purports to lead – ranging from Mauritania and Chad to Pakistan and Malaysia – with a “joint operational centre” located in Riyadh.
How this new coalition will contribute to pushing Isis out of its heartland in Raqqa remains to be seen. What can it achieve militarily that the current US-led coalition cannot? Moreover, doubts about Saudi Arabia’s motives are legitimate: the kingdom may well be intent chiefly on salvaging its international image, severely dented by a dismal human rights record and decades of propounding a radical Sunni ideology that arguably reaches its twisted apogee in Isis itself. It may be no coincidence that the announcement came the day before Saudi blogger Raif Badawi, who has been sentenced to prison and flogging for criticising religious figures, was awarded the European Sakharov prize for freedom of thought.

Some will worry that the fight against Isis is to be fronted by a nation that itself beheads at home, and exports dubious ideas abroad, even if Saudi Arabia does not kill and maim on European streets in the way that Isis does. Others will fear that this move only entrenches a sectarian proxy war fought by Saudis and Iranians on Syrian soil. And yet, for all the concerns, the pragmatic reality is that this is a significant development. In the eyes of predominantly Sunni countries, Saudi involvement may consolidate the legitimacy of the anti-Isis fight. It denies the jihadis’ claims to be the Sunnis’ sole defender.

The Saudi initiative does not answer the key question about what ground troops will be available. But the Saudi foreign minister, Adel al-Jubeir, has said “nothing is off the table”. If words are matched with deeds, the new Saudi-led alliance could lend some missing shape to a regionally rooted strategy. Defeating Isis cannot, after all, be a solely western effort. It must involve all states and societies – not least because its most numerous victims are Muslim

insurgency
An organized rebellion aimed at overthrowing a constituted government through the use of subversion and armed conflict

pur·port
Appear or claim to be or do something, especially falsely; profess.

heart·land
The central or most important part of a country, area, or field of activity.

sal·vage
Rescue (a wrecked or disabled ship or its cargo) from loss at sea.

pro·pound
Put forward (an idea, theory, or point of view) for consideration by others.

flog
Beat (someone) with a whip or stick as punishment or torture.

maim
Wound or injure (someone) so that part of the body is permanently damaged.

prag·mat·ic
Dealing with things sensibly and realistically in a way that is based on practical rather than theoretical considerations.

DAWN (pakistan)
Indian FM’s resolve

IT doesn’t appear to be the same Sushma Swaraj who had issued an ultimatum to Sartaj Aziz in August to scuttle the national security advisers’ talks.
On Wednesday in the lower house of parliament, the Indian foreign minister defended her government’s decision to have a comprehensive dialogue with Pakistan because “war is not an option”.
The “shadow of terrorism”, she said, could only be combated by dialogue with Pakistan and one meeting wasn’t enough. Ms Swaraj dwelt on the background to her meeting with Pakistan officials at Islamabad and referred to the two prime ministers’ meeting in Ufa and Paris and the NSA-level talks in Bangkok.
Also read: War with Pakistan not an option: Indian FM
The two prime ministers had developed the “understanding” that the way forward was talks; this was followed by the Bangkok meeting where the national security advisers of both countries had “candid and constructive discussions”.
She referred several times to “all problems” but implied that those concerned only terrorism. Ms Swaraj, of course, couldn’t afford to utter the ‘K’ word while facing a hostile opposition, but she stoutly defended the resumption of talks. Two days earlier, too, she had spoken of her visit to Pakistan before an opposition which seemed to delight in flippancy.
Given New Delhi’s hard line since Narendra Modi’s assumption of power last year, Ms Swaraj’s assertion that she believed in the continuation of the dialogue deserves to be welcomed, with the hope that India will not look for an excuse to wriggle out of the commitment.
Given the repercussions of the Mumbai carnage, there is a need for the two countries to activate the “anti-terrorism institutional mechanism” set up by former president Pervez Musharraf and former Indian prime minister Manmohan Singh at Havana on Sept 16, 2006.
The mechanism never got going and needs to be pulled out of dusty files and resurrected. Another act of terror could sabotage the nascent dialogue, but, as Ms Swaraj said, “we would like to ensure we are not provoked by saboteurs” to stop the peace process

scut·tle
Run hurriedly or furtively with short quick steps.

stoutly
In a resolute manner; “he was stoutly replying to his critics”

wrig·gle
Twist and turn with quick writhing movements.

re·per·cus·sion
An unintended consequence occurring some time after an event or action, especially an unwelcome one.

res·ur·rect
Restore (a dead person) to life.





Thanks
Your kp.

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