The 7 Year Talk (That Failed)

As I was reading the papers this morning, I realized that one piece of news dominated all the papers. The global trade talks, or the so called Doha, failed after 7 years of on-again and off-again negotiations, as none of the countries could reach an understanding. But all the articles I read blamed primarily India and China. I was laughing to myself as it looks like not many people have an understanding of the real reasons of why the talks failed. Why blame India and China?? The US is probably frustrated that they are not able to impose their will on the entire world anymore given that India, China and Brazil have emerged as trading powerhouses. The Doha talks aim to open markets for farm, manufactured goods and services around the world but have struggled to overcome differences between rich and developing nations.

The issue at hand was simple. Developing countries like India and China were asked to reduce tariffs on agricultural and industrial goods, which in turn would allow developed countries like the US, France and Britain to gain access to these markets. India and China however wanted a safeguard clause that would allow them to raise the tariffs in case there was a sudden surge in imports which would threaten their farmers in the domestic market. The US wanted to set the trigger at 40% while India and China wanted it to be set at 10%. No one could agree on the SSM (Special Safeguard Mechanism) and the talks broke down.

The criticism may sting, but the two Asian giants are not likely to succumb to overseas pressure. Both countries enjoy high economic growth, thanks to overseas demand for their manufacturing and outsourcing services. One fact that no one is talking about is that in 2003, the US did the same thing i.e. they invoked a so-called “safeguard” rule to prevent an increase of Chinese textile imports that threatened to put the US manufacturers out of business. So when India and China now want the same safeguard clause, the US is refusing to accept the Chinese and Indian position. Indian and Chinese leaders also have to worry about economic hardship of their farmers as they have struggled to compete against imports from the U.S. and other countries. It's interesting that China and India are being blamed for the failure of these negotiations - the real culprits are the massive farm subsidies in the US and Europe. The playing field is heavily biased in favor of developed nations which give out subsidies to their own farmers while trying to pry open markets in poorer parts of the world. The Americans and Europeans were pretty much asking weaker countries to dismantle their own protection measures without doing the same in their own countries. I'm glad India, China and Brazil had the clout to say no.

While the US has a mere 2% of its population who are farmers (and even they are rich), India has more than 50% of its population doing agriculture and earning less than $2 a day (There are 700 million people who directly or indirectly depend on agriculture in India).China has approx. 500 Million people living in countryside with no basic amenities. Lowering tariffs and giving subsidies will pretty much bring more than half the population in these countries to their knees.

America having the biggest economy in the world was making its own rules through the WTO and was changing them as they saw fit. Again, nothing wrong with that but as China and India builds a larger economy, expect them to do the same.

Iran and Its Missiles

It appears that Iran has put out a fake photo of their recent missile launch, showing four missiles shooting through the air rather than three. Though it can’t be said with any certainty whether there is any official Iranian involvement in this drama with a funny twist, but the image released by the State showing Iran firing its missiles was “apparently digitally altered”. The fourth missile “has apparently been added in digital retouch to cover a grounded missile that may have failed during the test”. Early this week, Iran said it test fired a series of long range and medium range missiles escalating the tension over its nuclear program. I guess Iran is just trying to send a signal to the rest of the world about their capabilities but it looks like they are grossly exaggerating their strength.

I guess the whole purpose of these launches was to demonstrate Iran's capabilities and a photo showing one out of four rockets failing doesn't have the intended impact, but hey, at least we know Iran’s state media uses Photoshop.

Oh Barak!! Are You Running to the Center?

With both the DNC and RNC just over a month away, the battle lines are being drawn. However, it looks like it will be the independents who will decide who will take oath in the white house next year. Obama, the presumed Democratic presidential nominee, has interestingly begun taking centrist or even hawkish positions in recent weeks on foreign policy, trade, the death penalty and other hot-button issues as he introduces himself to independent and swing voters, many of whom know little about him or have heard criticisms that he is too liberal or that he is a muslim. While Obama is making a play for centrist voters, McCain's strategy seems more geared to catering to the conservative base, as he has steadily moved to the right on a range of issues.

But as both Omaba and McCan try to appeal to the idependents, both are reversing or flip-flopping (Since that seems to be the popular term) on almost all of their policies on which they won the primaries. However, it is Obama who is beating McCain to the punch as he is moving so quickly to the center that he has irked some of his supporters, well actually a lot of his supporters.

In the primaries, Obama supported pulling out of Iraq, called the DC gun ban constitutional, backed the subjection of telecom companies to extensive lawsuits if they cooperated on terror surveillance program, opposed welfare reform, criticized free trade deals and pledged to renegotiate NAFTA and fiercely opposed it and was strongly against the death penalty.

However, he has now almost taken a different path and deviated on all his own stances. He told Fortune magazine he believes in free trade and does not want to overturn or pull out of NAFTA. On Iraq, Obama said that his upcoming trip there might lead him to refine his promise to quickly remove U.S. troops from the war and he will now listen to the general (we all know how that goes). Obama also extended his support for the government's eavesdropping program as the spy bill passed the senate today. After the Supreme Court overturned the District of Columbia's gun ban, he said he favors both an individual's right to own a gun and government's right to regulate ownership and declared himself a "supporter of the Second Amendment". Obama also became the first major- party candidate to reject public financing for the general election after earlier promises to accept it. He not only embraced but also promised to expand Bush's program to give more anti-poverty grants to religious groups, a split with Democratic orthodoxy. The most surprising stand was when he objected to the Supreme Court's decision outlawing the death penalty for child rapists, drawing attention to his support for the death penalty if used only for the "most egregious" crimes.

With today's gallop poll showing Obama leading with just 48% - 43%, I think he may be risking his reputation for truthfulness. If he loses his reputation, he certainly does not have time to gain the voters trust with just 3 months before they go to poll.

Time to Wake Up Mr.PM

India is a maze of conflicting rules, regulations and corruption that twists democracy to produce a constant squeeze on companies to appease the rules and tossing a bone here and there to the massive welfare state through taxation, employment demands and playing the old game of "west vs. east" in the political and economic arenas. I have always wondered what the current Congress govt has done for the last 4 years or so. I mean what is their real achievement. In a word, NOTHING. They can claim credit for a lot of things, but everyone knows that India's real so called economic boom started long before this govt took office.

The weak central government, which is run by an uneasy coalition between the Congress Party and the Left Front, is solely contributing to the unrest where prices are spiraling out of control and it is getting more and more difficult for the comman man to afford anything really. The inflation has jumped to 11.42% and the prices of food and manufactured products and the govt is unable to take any steps to control it...just blaming rising global oil prices. For five years starting from 2007, the Planning Commission has targeted Indian economy to grow at 9% with the last year delivering a growth of 10% . The current rise in inflation and high interest rates have already left a dent on the industry and the production growth rate of the country has substantially slowed down in the past four months. Inflation was at a modest 3% at the end of the year 2007, and is at present hovering over 11 per cent mark, the highest level in 13 years. This year the forecast for economic growth or GDP has been reduced to 7.3%.

The rising corruption is an new issue altogether that people are being forced to deal with. The 'India Corruption Study 2007', brought out by NGOs Transparency International India (TII) and Centre for Media Studies (CMS), found that about one-third of Below Poverty Line (BPL) households in the country bribed officials to avail a total of 11 services -- from police to PDS. According to the survey, which covered 22,728 households in all states and Union Territories, Rs 8,830 million (Rs 883 crore), in all, was estimated to be paid as bribe by BPL households last year. Its a shame that government officials take bribe from people who cant even make a decent living.

The Govt also has failed on the policy front. With the only aim of staying in power, the govt is totally dependant on all its so called coalition partners who all seem to be more keen on opposing everything that the govt does and threatening to pull out of the coalition. It is sad to see that the politicians are more keen to stay in the headlines rather than tackle the real problems that the country is facing. It has become amusing to read about the nuclear deal and what every party has to say about it. Indeed Mayawati from BSP took the cake when she said the deal is' Anti-Muslim'. Not sure what the deal has to do with religion but it proved there is no end in sight if Mr.Singh wants to please every tom dick and harry in the country before he actually acts. The PM, instead of leading the country is begging the various party leaders for permission to conduct the affairs of the state.

Time to wake up Mr.PM and do something real for the country, even if it means you lose support from your so called coalition partners. The drubbing you have taken in the last 4-5 states should tell you that people are in no mood to put up with the games the Congress is playing.