11.11.2008

Trade

• India's exports nosedive
• India's export performance for the month of October 2008 is feared to be reaching its lowest in the past five years. The DGFT (Directorate General Foreign Trade) is still compiling the figures. But preliminary estimates point to this bleak scenario.
• India has kept for itself an export target of $200 bn in the current fiscal. It is feared that it is unlikely to be achieved. What is to be noted is that our petroleum exports (refined products) are a saving grace. But all our labour intensive exports are taking a hit. What this means is that employment in those labour intensive sectors will be negatively impacted.
  
• Take a look at the export performance till September 2008 here.
• India's DGFT currently is Sri. RS Gujral.
• UK lifts ban on Nuclear exports to India
• BRITAIN on Monday announced the lifting of a ban on exporting sensitive nuclear technology to India for civilian projects, giving momentum to resumption of global atomic cooperation with New Delhi after the end of its over-three decade nuclear apartheid.
• Since March 2000, the UK policy has been to refuse all licence applications for trigger list items to India. That policy has now changed and UK will now consider on a case-by-case basis licence applications for peaceful use of all items on the NSG trigger list and NSG dual-use list when they are destined for IAEA safeguarded civil nuclear facilities in India.
• Two important phrases that you might have noticed in this context are: "NSG trigger list" and "NSG dual use list." What do they mean and what is the difference?
  
• NSG trigger list is so called because exports of such material triggers the requirement for safeguards. Listed items could only be exported to non-nuclear states if certain International Atomic Energy Agency safeguards were agreed to or if exceptional circumstances relating to safety existed. NSG Trigger list tries to be in consonance with the Zangger list of NPT. We can say that both are more or less the same.
  
• NSG dual use list. This is the list which it came up with in 1992 in the wake of revelations following the first Gulf war of a clandestine Iraqi nuclear programme.
  

Finance & Economy

• Is the current liquidity infusion likely to feed inflationary pressures?
• This is an issue that is already stimulating some minds. Central banks the world over appear to be behaving like a herd and are resorting to only one thing -- infuse more liquidity into the financial system to beat the current financial owes. But will this not lead to inflationary pressures?
• Expert speak (from Manoj Vohra, India Director of Economist Intelligence Unit) is that the high demand for liquidity that prompted the liquidity provision is not a consequence of higher demand for goods and services, but the result of a shift away from risky assets to safer ones, and thus should be deflationary as long as liquidity is withdrawn once risk appetite returns.
  
• Is India's inflation scene having anything to do with this excess liquidity? What are the reasons for its refusal to moderate? Look at this excellent analysis from Ashima Goyal:
• First, since prices tend to be rigid downwards, the base effect matters. The WPI index was low in February and rose by 5.5 points in March. So annual inflation calculated on a low base will continue to be high until March 2009. But there are hardly any point increases in the WPI now, implying the inflationary impulse has worn off.
  
• Second, it is instructive to look at the components of the WPI index. The index of manufacturing products has been falling since the end of August; the fuel index has been stable since then. Primary articles fell from end September, but reversed in the last reported week; there are seasonal fluctuations in their major component food articles. Until these cyclicals fall, as the new harvest comes in, and administered fuel prices are lowered, a major fall cannot be expected in the index. The steady fall in the manufacturing price index, however, by three points from its peak shows cost-push has abated, there is no second round price pressure, inflationary expectations have not taken hold, and excess demand is absent.
  
• Third, the exchange rate impacts inflation. The depreciation from 40 to 42 in May coincided with a jump in the WPI index between May and June. Since the steep price commodity cycle broke in July, resisting the depreciation could have moderated the 13% peak in inflation. By October the exchange rate had reached 50 and probably affected some primary articles where price pass through is rapid. As the acute stage of the financial crisis passes, outflows should moderate — the rupee has begun to strengthen again. Falling oil prices will reduce the import bill.
  
• Fourth, Indian inflation is moderate compared to our neighbour Pakistan's, where wheat prices were raised, and inflation shot to crisis levels. Food price inflation has a major impact on the wage-price cycle and second round inflation in a low per capita income country. The new harvest and higher agricultural productivity are critical for inflation control.
  
• Fifth, monetary policy weapons against supply-side shocks are limited. Firms have to cut costs and the government should remove infrastructure bottlenecks and waste — to battle the slowdown and inflation.

Computing & IT

• What is Web 2.0?
• I am sure many of you have heard about this phrase "Web 2.0." What exactly is this animal? Any idea?
• Though the phrase invites many different interpretations, the one that I found worthy of remembering goes like this. It is characterized by three features that I outline below. If you are a non-geek, don't be alarmed by some of the words and phrases mentioned below. Just Google for them and you should get any number of definitions. Either if you don't or are still confused by them, shoot out queries in the shout-box and I will do my best to answer your queries. Now back to the three key features of Web 2.0:
  
• RIA: Rich Internet Applicatons. What this feature is concerned with is bringing about a desktop like interface to the web experience. For eg., drag and drop feature. What are the technology tools that will enable this? We an say Flash & AJAX.
  
• SOA: Service Oriented Architecture. This feature means offering cool tools like feeds, mash-ups and web services. I guess many of you may have seen feeds and mash-ups in action; but might still have some confusion about web services. We can say that it means the ability of a web application to announce the services that it can offer to the world and wait for connections requesting to use its announced services.
  
• Social web: This is the feature that makes the Web 2.0 application interact much more with end user. It sees the end user as much more than a mere user of the application or data; she is made part and parcel of the data and/or application. You might have experienced technologies like Wiki, tagging, podcasts and blogging. We can say that these are the things that make the web a highly social place or the Social Web. What are the technologies that make these possible? The first is AJAX. Then languages that make extensive use of the web services support and are highly iterative. By iterative what is meant here is that it has the ability to add new features, deploy them and update the application as if on the fly.
  

Sport

• Test Cricket series win over Australia
• I really lost track of this sport. Long back. But am surprised that India scored a win over visiting Australia after a long gap of 20 odd years! In the four-game series which concluded at Nagpur on November 10, India beat Australia comprehensively, 2-0. The Mohali Test was won by a margin of 320 runs, a record for Indian cricket. And India won the Nagpur Test by 172 runs.
• Good. But the couple of times that I cared to watch the progressing Test match on the TV (while channel surfing ofcourse) I found that the stadium stands were totally empty. Looks like test matches are played for the sake of sporting (cricket) statisticians!

Movies

• Seen the latest James Bond flick?
• Quantum of Solace. (Saw it first day first show, BTW) It reportedly is doing quite well at the Box Office. Appears to have grossed well over Rs. 17 crores in the first three days in India.
• Of all the Bonds, James Bonds, that I have seen so far, Daniel Craig appeared to be a real Bond for me, although his predecessor (Pierce Brosnan) was equally good in looks but not so good in body maintenance.