Politics & the Nation
  • India's stand at the WTO talks
    • We have huge differences with the US over the issue of sectoral tariff elimination.  While the US holds that participation in the negotiations on eliminating tariffs on select sectors like chemicals and automobiles & parts should be mandatory, we say that it should be voluntary.
    • The other issue where we are at loggerheads with the US is on the level of protection to be accorded to poor farmers under the SSM (Special Safeguard Measures) to protect them from farm import surges.
  • Voting in Estonia 
    • This is one country which has made great strides in bringing about drastic changes in its voting methods.  It was the first to allow its people to vote through internet ballots in last year's Parliamentary elections.  
    • It is now hoping to allow its voters to cast their votes through their mobile phones in 2011.
  • Offshore banking set to move onshore?
    • Worldwide, offshore banking is a $7 trillion industry.
    • With the US and many other countries now viewing offshore banks -- known for their secrecy clauses -- with lot of suspicion, they are looking at making a move to onshore banking.  Though offshore banking will not immediately die, it is reportedly facing the toughest ever challenge since the days of holocaust money.
    • BTW what is holocaust money?
      • In 1934, a year after Hitler's rise to power sent tremors of fear across Europe, the Swiss legislature passed a law guaranteeing anonymity to anyone who transferred his savings to a Swiss bank. The Germans under Hitler persecuted the Jews from 1941 to 1945 in what is popularly referred as the holocaust.  This secrecy law passed by the Swiss coupled with the persecution the Jews faced in the hands of Germans made lot of money flow into Swiss banks during this period.
      • When after the war, survivors or heirs of depositors came to claim their assets, the bankers invoked the same law of confidentiality to block any payment. They even required death certificates for those who perished in the death camps.
      • Many of the Swiss banks have reportedly emptied the Jewish accounts that had lain dormant since WWII.  About a decade ago the holocaust survivors won compensation from the Swiss banks for this.  The money held in such accounts is what is referred to as holocaust money.
  • Snippets on Iraq war
    • More than 4,209 soldiers of the US military have been killed in the war since it began 5 years and 9 months ago.
    • The war has so far cost the US, about $576 bn.
    • There are about 1,49,000 US troops in Iraq.
  • Non-voluntary HIV testing incurs Govt. wrath
    • In a move aimed at stopping the discrimination faced by patients of HIV and AIDS, the government is contemplating a ban on companies from conducting HIV and AIDS test or prospective employees.
    • About 2.4 mn Indian are infected with HIV/AIDS.  Of this 36% are stated to be below 30 years.
    • Do you have any take on this contemplated ban?
Finance & Economy
  • The prospects and challenges our BPO industry faces
    • The sector has earned about $11 bn in revenues, registering a CAGR of 35%.  It employs about 9,00,000 people directly.
    • The domestic BPO market is pegged at $1.6 bn.
    • BPO is a global opportunity of over $50 bn by 2012.
    • While cost arbitrage is a given in the Indian context, what else can be done to strengthen India's BPO sector?
      • First, creating a greater link between the current education system and the industry requirements.  This can be achieved through more industry-academia interaction, BPO specific curriculum and training teachers in sync with BPO industry.
      • Second, investing in employees to increase their domain and process expertise.
      • Third, a move to business transformation partnership that will reduce the over-dependence on cost arbitrage.
  • Government consumption
    • It includes current expenditure of the public sector and salaries of government employees.
    • It is currently about 14% of total consumption.  This is expected to spur demand in the last quarter of the current fiscal.
  • How is StanChart avoiding the negative outlook?
    • Because it derives 2/3rd of its business from Asia.  And Asia is now being seen as an island of prosperity in the global recession.
    • So, while every other major MNC bank is cutting down on headcount, it is on a hiring spree.
  • Why is that our economy is not kickstarting itself in spite of the liquidity infusion given by RBI?
    • Th ecombined effect of the rash of measures announced by RBI since September led to an infusion of Rs. 3 lakh crores into the system.  In spite of this credit offtake has not witnessed a revival.  Why?
      • First, banks are still wary of lending to corporates and they are uncertain about the future.  They are doubtful about the corporates' ability to pay up in time.
      • Second, the corporates are also wary of increasing their debt position when the outlook for the economy is appearing not bright.  So, they are concentrating on finishing what is currently on; instead of making any commitments on new projects.
  • Remember the BDI and MTI?
    • BDI: Baltic Dry Index
    • MTI: Maritime Transport Index
    • These are leading indicators for the global economy.
    • A rise in these indices points to an increased freight movement across the globe.  Therefore a rise in these indices means an increased economic activity on global scale.
    • The BDI has seen a rise of 48 points in the last week.  Whether or not this is a blip will have to be watched.