Bhutan economy: India centric.

One of the smallest countries in the world, and a landlocked one at that, Bhutan is tied to India in a fundamental way, for its survival and sustenance. The country’s foreign policy and defence is under India’s control, and it is India’s technology and economic assitance that keep the country going, practically speaking.

Agriculture and forestry, hydroelectricity, tourism, etc are the major economic activities of the country, and the major components of its economy. Rice, corn, citrus, etc., are the major agricultural produce. Cement, processed fruits, wood products, etc., are the major industries. Electricity is the major export of Bhutan. Other exports include timber, handicrafts, cement, fruit, spices, precious stones, etc. Among the imports are machinery, equipment, vehicles, textiles, rice, fuels, lubricants, etc. India is Bhutan’s leading trade partner. Others include Japan, Sweden, Bangladesh, etc.

Bhutan’s GDP growth rate is around 6% for fiscal 2009, and services accounts for the major share of the GDP at 40%, followed by industry at 38%, and agriculture at 22%. Whereas 63% of the labor force is engaged in agriculture, 315 in services, and 6% in industry. The unemployment rate is around 2.5%, and inflation is around 5%. A major problem is the public debt that stands at 80% of the GDP. A good part of Bhutan’s budgeted expenditure is financed by India, which is like a Big Brother to Bhutan.

The Government of Bhutan is making efforts to develop responsible tourism that is eco-friendly, and trying to attract upper end tourists who would contribute more to the economy, while causing little damage to the environment.

Bhutan has a long way to go before it puts a sound industrial and services infrastructure in place. And in the forseeable future, it does not seem to have a way around India, that will continue to call the economic shots in Bhutan.

Nepal economy: Aiming for steady growth.

The Himalayan Kingdom of Nepal is one of the poorest countries of the world, with over 40% of the population living below the poverty line, and over 46% of the workforce out of work. The fact that the country is landlocked adds to its problems in terms of free access to markets around the world.

An agricultural economy, Nepal producesd barely, fruits, medicinal herbs, rice, tobacco, etc. Among the important industries are cement, cigarettes, garments, jute spinning, and of course tourism. Tourism is a major foreign exchange earner, and Nepal is not embarking on a controversial plan to boost alternate sex tourism. That is to attract gay and lesbian tourists from around the world, through special tourist packages. Until now, adventure toursim was the mainstay of the tourism industry, attratcting the adventorous from around the globe that are fascinated by the Himalayas. The country received over half a million tourists this year, and aims for the one million figure by 2011.

Nepal exports carpets, jute, leather goods, rice, sugar, timber, etc., and imports foodstuffs, machinery, transport equipment, etc. India is Nepal’s major trading partner.

The country’s GDP is expected to grow by 4.7% in fiscal 2009, while inflation is running at 7.7%. Industrial growth is around 7% for 2009. Deforestration is a major problem that is having several side effects, including flooding. Political instability, of late, has aggravated the economic problems of the country.

Nepal is a regular receipient of foreign aid that has helped the country in its developmental efforts. However, the tough geographical location, and the shortage of skilled manpower, coupled with infrastructural bottlenecks hinders the country’s march towards economic development and progress.

Nepal faces tough choices in its efforts at economic development, and must adopt prudent economic policies, aimed at creating a pool of trained manpower, and attracting foreign investment, especially in the infrastructure field, to ensure its future development. The Government appears to be alive to this challenge and taking tentative steps in this direction.

BRIC are raring to go-Part IV

This is the fourth and the concluding part of the article on the summit meeting of the BRIC group in Yekaterinburg, Russia.

 

Energy Security:  At par with food security is the issue of energy security, for the world and its population.   With the world’s resources distributed unevenly, more so oil, the issue has been a matter of much heartburning among the have-nots.  

 

This is definitely a major issue for deliberations at the BRIC summit.   It is not clear how far the group is likely to go to press for a fair and equitable energy regime, as Russia is a major oil producer, and may not like to disturb it’s own applecart.

 

Nuclear Non-proliferation:  This is one issue on which the Western nations have exposed themselves time and again, with a one-sided approach.   While retaining their own right to proliferation of deadly nuclear weapons, they have sought to restrict the right of other countries to develop nuclear energy even for peaceful purposes.   This duplicity has led to a dangerous situation, with come of the countries like India, Pakistan, Israel, North Korea, etc., secretly developing nuclear capabilities, whose consequences are difficult to predict.

 

How exactly the BRIC group is going to tackle this issue would be a matter of interest.

 

Climate change:  After steadfastly refusing to toe the international line on this subject, the U.S. Government, under the present administration, has at last acknowledged the importance of climate changes to the survival of the world.  

 

The problem with this issue is the selfishness of countries in protecting and promoting their own economic welfare at the cost of others.   The BRIC group has decided to tackle this issue at its June sixteenth meet.   A wise approach to this problem would have beneficial effects in the long term.

 

The Yekaterinburg summit of the BRIC group is a significant event that is likely to set the tone for the lesser developed and emerging economies playing a more prominent role in world affairs, especially on the economic front, and that is expected to bear fruit in the form of economic stability and progress.   If the group really gets their act together, the West may have a problem on their hands.

                 

                                                                                 Concluded.

 

 

                                                                                                                                                .Concluded

BRIC are raring to go-Part III

This is the third part of the article on the summit of the BRIC group in Yekaterinburg, Russia.

 

Reform of the global financial system:   The global financial system, all along, has been dominated by the Western powers, who have subverted the system for the benefit of their own countries.   The capitalist system has been projected and promoted as the only right system of economic and financial governance, for the whole world, regardless of the circumstances and the economic conditions prevailing in other parts of the world.

 

The present crisis has shown the hollowness of this claim and exposed the weaknesses of that system to such a painful extent, that even Western commentators are speculating on the possibility of the demise of capitalism.   This development has provided an opportunity to the second rung economic powers to showcase their own systems as an alternative to the present one.

 

The BRIC group would like to bring about reforms to the present financial system, by injecting into it, some of the elements of their own systems, to increase their own stake, and control of the global economic system.   Reducing the influence of the Western stakeholders in the global financial system is one of the major tasks that the emerging economies have set for themselves.

 

The official stand of the emerging economies is that, the world economic system is slanted to serve the interests of the Western world, and to concentrate the benefits of the system in the hands of the few countries that control the major portion of the world’s economic assets.   Of course, there are issues between these emerging economies that are not easy to resolve.   But they seem to have made a beginning towards addressing these issues, with the intention of capturing the economic space that the West is bound to vacate in the years to come.

 

Food Security:  Hunger has been a recurring theme in the lives of a vast swathe of humanity for long.   The poorer countries are accustomed to this phenomenon on account of their long exposure to it.   But the present crisis is impacting on the food security of the developed countries also, and is setting the stage for social unrest not seen in the past.  

 

The unsettling effect of insecurity on the food front is an issue no Government can ignore in the present age, with growing awareness of the general public of their various rights.   The BRIC group, especially India, has a vast constituency of hungry souls that is bound to pose a serious threat to the ruling elite.

 

It is a welcome development that the emerging economic powers are addressing this serious issue, whatever be their motivations.

 

                                                                                      To be concluded.

 

BRIC are raring to go-Part II

            This is the second part of the article on the summit of the BRIC, being held at Yekaterinburg, Russia. 

 

            Reserve Currencies:  One of the major concerns of the BRIC grouping is the idea of a new reserve currency that would have a stabilizing effect of the world’s currency and financial markets.   They would like the world to depend less upon the U.S. Dollar and increase the role of the International Monetary Fund, of course, with a more decisive role for them in the Fund management.   The idea is to strengthen the IMF by pumping in more funds to enable it play a more prominent role in world economic affairs. 

            Russia, in particular, is keen about promoting a supranational currency, and more importantly, with the Russian rouble playing the role of a world reserve currency.   This would give enormous clout to Russia, in international economic and financial affairs.   That again raises the question, as to whether China and other members of this grouping would like that. 

            G20 Policy:  This is another major area for discussion and debate by the group in their summit meeting.   The G20 nations had come up with an elaborate policy statement of intent at their recent summit to tackle the economic crisis and to literally save the world from going under.   The G20 had recently come out with a policy paper laying down its action plan that would touch upon all the important issues affecting the economic conditions of the major part of the world’s population. 

            How exactly this would be done, and what role each of the member countries would play, and the possible results of this exercise, are some of the issues the BRIC group is likely to discuss.          

             Basically the BRIC group is looking to increase its influence in world affairs, taking advantage of the current crisis, by providing what they claim is a better alternative to the present system of economic and financial management.

 

                                                                                          To be concluded.

 

BRIC are raring to go-Part I

The BRIC meet today, the sixteenth, at Yekaterinburg, in Russia.   To discuss how to capture the international economic space, by pushing aside America and its allies.

 

BRIC stands for the names of the four emerging economies, namely, Brazil, Russia, India, and China that are expected to play an increasingly important role in world economic affairs, in the near future.   This seems to fall in line with the prediction of Goldman Sachs, who coined the term in 2003, and predicted that these four countries would provide stiff competition to the Western economies, and may overtake them in the next fifty years.

 

The leaders of these four countries are likely to discuss and debate on the following important issues affecting the world, at present:

 

Responses to the global financial crisis:  The global financial crisis, a result, largely on account of the bank failures in the U.S. and the related developments, has badly shaken the international financial system.   The consequences of these failures have affected the world at large, interwoven as it is, through a complex web of financial and economic pacts and arrangements.   No country can remain an Island in the present age, and has to be concerned with the developing scenario of increasing economic hardship, unemployment, social unrest, etc.   

 

The present crisis has thrown up opportunities to the second level powers that have been waiting in the wings for long, to showcase their strengths, and to stake their rightful place in the world.  

 

Alternatives to the U.S. Dollar:  One of the most significant developments arising out of the present crisis is the serious thought being given to the utility of the American dollar, and the possibility of replacing it with an alternative currency, that would act as a stabilizing agent, a role played hitherto by the U.S. Dollar.   If it becomes a reality, it would indeed be a major victory for the second rung economic powers that could change the international financial landscape forever.

 

                                                                                         To be concluded.

 

 

BRIC to the fore.

Yekaterinburg.   An unusual name, one would not associate with an earth-shaking economic development.   But that is what it might turn out to be, if the BRIC nations had their way.   And the day is almost upon us.   The sixteenth of June.

It is on this day that the BRIC nations are scheduled to hold their first summit, to press for their claims for a prominent and a permanent place under the sun.   BRIC is the acronym for Brazil, Russia, India, and China, the four emerging economies that are expected to play a leading economic role in the years to come.

 

These four countries have been least affected by the economic crisis the world is going through.   Consequently they are contributing to the stability of the international economic system, whether to the liking or dislike of the Western world.   Willy nilly, the West has to accept the stabilizing role of these countries under the present circumstances, and hope that they themselves recover from the crisis, while the BRIC nations hold the fort.

 

With the economic crisis steadily chipping away at America’s strength, and its influence in world affairs, the emerging economies are having a field day, at the cost of the only superpower, and quite enjoying it!  

 

The BRIC summit is slated to discuss matters of substantative importance for the world at the moment, like the present global crisis, alternatives to the American dollar, a new reserve currency, the G20 policies, reform of the global financial system, food security, energy security, nuclear non-proliferation, and climate change.

 

It should be particularly galling to the Americans and their allies to get lessons on these subjects from their “subjects”.   But with China holding the largest share of U.S Treasuries, and the four nations accounting for roughly 15% of the global economic output, it would appear that these emerging economic powers are destined to play a prominent role in world affairs, economically, and in other ways, in the years to come.

 

 

 

 

 

LET THE TAMASHA BEGIN!

Its election time in India folks!   Who are you going to vote for this time?   Does it really make a difference?   Does it even matter if you vote or dont?    That depends on how you look at the issue, and where your own interests lie.

Major Issues:  What are the major election issues in India, this time around?   Well, the comfort zone of “terrorism” is no longer inviting and safe.   It may, infact, give negative returns.   Economics has overtaken all other considerations, and come on to  the forefront of political battles, that lie ahead.   And jobs, the least glamorous, but the most relevant issue affecting dozens of millions of Indians is now uppermost in the minds of the electorate.   Of course, how much of a “mind” the electorate has, is a different matter altogether, given the voting patterns in the past elections!

The Challenges:  The change of guard in America has also changed the old equations for the Indian ruling classes.   The Indian political elite will definitely miss the indulgence of the Bush administration, towards the various sins of omission and commission merrily committed by the Indian elite.   Having enjoyed a jolly ride for eight long years thus, adjusting to the new realities of the changed situation, is not going to be easy for the Indian rulers.

Compounding  their problems is the current economic crisis in the United States, and elsewhere.   Job opportunities in the U.S. for the Indian middle classes are fast drying up.   And a reverse flow of expatriates back to India, after losing their jobs abroad, has begun.   The new American administration has, inevitably perhaps, come out with legislation to protect the American workers, and industry.   Outsourcing of jobs to other countries at the cost of the local labor, and employing aliens ignoring equally qualified locals would be penalized now.   As it so happens, the majority of the jobs outsourced by American companies go to India;  and naturally, now India has to suffer the most on account of these new laws.   Having enjoyed  free lunches for a long time practically, the Indian establishment is now forced to address the long standing issues that remain unresolved even fifty seven years after Independence-Poverty, Unemployment, Illiteracy,  Diseases, Corruption etc., etc., etc.!

Immature Electorate:  On its part, the Indian electorate has rarely displayed the kind of maturity and common sense expected of it in its approach to voting in national elections, in the past.   Political Parties have almost always succeeded in diverting people’s attention with frivolous and even stupid issues, and away from the real issues.   But this time around, the politicians may not have it so easy.   Primarily, on account of the increasingly precarious job situation.   With industry and businesses laying off employees by the hundreds, practically every week, on account of the economic situation(what else), the increasing number of jobless makes it more complicated for the political classes to come up with a neat and  winning combination of promises and slogans, that have invariably paid dividends in the past.

At this point of time, it is difficult to predict the result of the election.   But the election itself should offer an insight into the minds of the Indian electorate, and the public at large.   Has the Indian electorate grown up?   Has it matured?   Has it developed the capacity of seperating the chaff from the grain?   Has it developed the ability to see through the politician’s empty promises?   Has it, at last, learned to recognize the real issues that affect its interests like poverty, unemployment, health, education etc.?   Or has it not learnt anything from its past experience and continues to labor under illusions and delusions?   Does fatalism still play a prominent role in decision making of the Indian electorate?   These, and many more questions will be answered soon.  

Conclusion:  To be fair,  the Indian voter, does not have much of a choice.   All the major political parties have been tried, tested, and found to be wanting.   And the new and smaller parties do not have the necessary fire power or the horse power to reach the goal post!  

Whatever the outcome of these elections, the winning party or combine may end up cursing their luck in winning the elections, given the developing economic crisis that is likely to hit India squarely in the coming months, if not weeks.  

LET THE TAMASHA BEGIN!

View expressed above are author’s personal.

H-1B AND INDIAN MIDDLE CLASSES

The H-1B visa is a non immigrant visa of the United States, that allows a certain number of aliens in specialty occupations like engineering, architecture, mathematics, accounting, law, etc, to take up temporary employment in the United States, if similarly qualified American nationals are not available, to fill up the vacancies.

Allegations about the misuse of this visa by American employers have been mounting over the years.   It would appear that there is, indeed, some truth in the allegations,  that, often, American Corporations, especially those in the Information Technology areas, employ aliens for lower wages than they would pay Americans for the same work,  by making false declarations to the American Immigration authorities about the non availability of qualified local candidates for these jobs.   And India keeps cornering the lion’s, or shall we say the rat’s share, of these visas.   Among Indian entities, it is the IT companies that grab the major share of these visas.   And among the Indian I.T. Companies, the Top Four are said to get the major share of the H-1B visas.

President Obama’s initiatives in the economic and trade areas have impacted on American immigration matters, as expected, and have adversely affected the fortunes of Indian professionals, especially of the I.T. variety, who until recently seemed to have a free run of the American Immigration System.   Obama is certainly bad news for the Indian Middle Classes that are hooked to the American Green Card, and see their future tied to the U.S. than to their own homeland.

The Indian Middle Class gentry is an altogether special category of piranha fish that is never satisfied with any amount of  worldly possessions.   Tomes could be written on the legendary, even shameful craze of the Indian Middle Classes for the American Green Card and American citizenship.   And it is not only the lower middle classes that are enamoured with the green card.   In fact, the higher you go up the Indian middle class hierarchy, the more craze for American citizenship.   Whether it is top officials in Government, including the ultra sensitive Departments, or top flying executives in the Banking sector or private companies, any one that is someone in the middles classes in India has a son or daughter settled in the U.S. or on the way to it.

The rapacity of the Indian middle classes in exploiting the system for personal gain has few parallels.  They corner the resources within the country to ensure a comfortable life for themselves, and thereafter work the system to get out of the country(!) and land up in the U.S.of A on any kind of visa they can grab.   With one leg in India and the other in the U.S. they enjoy the best of both the worlds.

Now with the American economy in serious trouble, and the American leadership constrained to protect local interests, the dream run of the Indian middle class parasites is running out of steam, it would appear.   With more and more American companies laying off their workers and unemployment at an 8.1% it is only at their personal peril,  that the American leadership, either corporate or political, can continue to support the employment of aliens in large numbers, at the cost of the locals.

With the real possibility of the American dream souring, and the green card going farther and farther away from their grip, the position of the Indian middle classes is like a drug addict going without his daily fix.   They are in a real tizzy now that going to America is no longer easy as it used to be.

It remains to be seen how far the Indian middle classes would subvert India’s national interests in the pursuit of their American dreams.

Views expressed above are personal ones of the author.

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