The Corporate ScoreCard

"The Results 2013" was an analysis of various development programs by the World Bank The aim of the programs is to achieve the Millennium Development Goals. A few are listed below.

• Recruitment and training more than 4 million primary teachers
• Training around 2.7 million health workers
• Antenatal care to more than 188 million women
• Construction/ Rehabilitation of more than 189000 kms of roads
• Access to improved water source to 144 million people
• Increased lending

The Corporate Scorecard has three parts, Tier 1, 2 and 3. Tier 1 includes the Development Context, Tier 2 has Country Result supported by the banks, Tier 3 has Development outcomes and Operational Effectiveness Tier 4 talks about Organizational Effectiveness and Modernization.


Development Context Tier )

In this the indicators are Growth, Jobs Property, Institution and Governance, Human Development and Gender, Sustainable Development, Finance Pri8vate Sector Development and Trade. This includes an analysis of the complete development process in the countries and the outcome in a long term perspective.


Country Results Supported by Banks( Tier2)

In this the indicators are Support to Institutions and Governance, Support for Human Development and Gender, Support to Sustainable Development, Support to Finance, Private Sector Development and Trade. This indicator will prove how the World Bank supports the banks to achieve MDG

Development outcomes and Operational Effectiveness ( Tier3)

Indicators of this tier were Development Outcome rating, Lending Operations, Knowledge Activities and Control statements. These indicators will analyze the Management performance of the Banks

Organizational Effectiveness (Tier 4)

The indicators tells about on how Banks manage their skills, capacity, Resources and projects. In Kenya is the greatest example of the Operational Effectiveness. World Bank with the help of IDA (International Development Association which support the poorest countries, by giving loans and credits), IFC (International Finance Corporation) and from MIGA (Multilateral Investment Guarantee Agency) set up three thermal power generation projects and a geothermal project owned by the private sector which has a generation capacity of 270 MW.


In Maldives new schemes for waste management were introduced with the collaboration of private and public entities with the assistance of IFC and IDA. This scheme's investment was around $50 million and the process included waste collection, transportation and disposal. This became a successful project and 70% of the countries waste is disposed locally which resulted in reduced greenhouse gas emissions, reduced air, marine pollution and an increase in power

G-SIBS in 2013 a Report by FSB

The Financial Stability Board headquartered in Basel, Switzerland monitors and recommend amendments to the financial system. The members are G20 economies, European Union and former Financial Stability Forum. FSB released this year’s. G-SIBS (Global Systematically Important Bank list in November. This report is about the amount of capital these banks have to hold to face any economic crisis.

This report cautions banks on the additional amount of capital they have to add up to face any financial downturn. HSBC and JP Morgan Chase have to add an extra capital up to 2.5%. Barclays, Citigroup, BNP Paribas and Deutsche Bank are running short of capital by 2.0%. Bank of America, Credit Suisse, Goldman Sachs, Group Credit Agricole, Mitsubishi UFJ FG, Morgan Stanley, Royal Bank of Scotland and UBS has to add their capital by 1.5%.

The last influencers on the world economy are People’s Bank of China, Bank of NewYork Mellen, BBVA, Groupe BPCE, Industrial and Commercial Bank of China LTD, ING Bank, Mizuho FG, Nordea, Santander, Societe Generale, Standard Charter, State Street, Sumitomo Mitsui FG, Unicredit Group and Wells Fargo and they have increase their capital by 1%.

As all the institutions are working on the policy to make more returns in the lowest capital, the decision of the FSB will force the G-SIBS to create new policies and new schemes. FSB has given time frame for resolution planning for these G-SIBS. The plan includes 1) Establishment of Crisis Management Group within 6 months, 2) Development of recovery plans within 12 months, 3) Development of a resolution strategy and review within CMG (Crisis Management Group), 4) Agreement of institution specific cross-border cooperation agreement within 18 months, 5) Development of operational resource plan within 18 months, 6) Conduct of resolvability assessment by CMG and resolvability assessment process within 24 months.

A Report on Digital Currencies

As the Bitcoin creating so much of buzz in the market it would be interesting to know the virtual currencies which hit the market and how they performed and their result in the long run

Beenz 1998-2001

Founded in 1998, in London by Charles Cohen, Beenz.com offered online currency which could be spending with participant merchant. One among the partners was Mastercard. Beenz.com raised 100 million from big companies like Oracle, Gucci, PPR and, Italian bank mogul Carlo De Benedetti. Purchasing of the currency was at local rate fixed by the company. The failure of Beenz started when people loosing confidence and miss selling. The company shut down all the operations in 2001.

Flooz

A year after the launch of Beenz.com, Flooz based in the New York went online for internet traders in the form of promotional bonus which can be used for merchandising purposes. The company had to shut down in 2001 based on the allegation by FBI that Russian stooges are misusing the credit card numbers for money laundering scheme. It’s an irony that Whoophie Goldberg, the comedy actor was the endorsing the brand!!!!!!!!!!!!1

Internetcash,

In 1999 itself Internercash started its operations but in 2001 it had to shut down its operations due to the failure of its business model. It was based on the prepaid concept, and the cards were sold in the denominations of $5, $10, $25, $50 and $100. They made good profit but they invested in building secure network, maintaining the architecture and card generation. Even though the company failed,their architecture was adopted by many companies including Visa and MasterCard.

E-Gold

This digital gold currency launched in 1996 and had millions of members but stopped its operations in 2001 however managed a re launch in 2001. The did a great deal of business in 2008 more than $2million worth of metal transaction in that year itself! The US based company's year to year turnover was more than 100%.

The company was based on a trust called "E-gold Special Purpose Trust which used to handle the physical metal for the members. The overwhelming success of this gold currency invited many hackers and phishing companies who also copied their business model including OSgold.com which operated with no gold! The site was used for many illegal activities and they had to shut down but they managed to re launch by 2011.

Digicash

The internet boom in 1990s witnessed another digital currency called Digicash, which was working on cryptographic codes assuring anonymity to the clients. During the partnership with banks they were restricted from keeping anonymity of the memebrs and thus went bankrupt in 1998.


CyberCash

This Virgina based company, went on with a $300 million IPO and went bankrupt in 2001 and they shut down their operations which they started in 1994. The company was bought by the predecessor of Paypal, Verisign.


Facebook Credits

Launched in 2009 and taken away in 2012. Working in the Facebook platform this currency was used to buy the FB apps and games. Available in 15 currency forms , they failed to create a currency for any other purpose than games. FB payments used to handle these transactions but they stopped operating in this currency and announced the transfer to the local currency.

Amazone Coins

The recent member in the virtual currency bandwagon, Amazone Coins was launched in May 2013 to purchase within Amazone.com.

Bitcoin is it a Future Currency?

Bitcoin is growing in a fast pace with around 12 million Bitcoin wallets by November 2013. This first ever decentralized crypto currency was published by Satoshi Nakamoto in 2009. He left his virtual presence in 2010 leaving many concerns behind. Even his name SATOSHI NAKAMOTO is believed to be coined from few companies Samsung, TOSHIba , NAKAmichi, and MOTOrola!!!!!!!!

The transaction in Bitcoin has grown tremendously over the years and even banks are speculating that Bitcoin will replace real money very fast. The concern is that Bitcoin is created in such a way that the number of Bitcoin will never exceed 21million and 75% is already been created. The value of Bitcoin in 2011 was $1 but it has risen to $ 140 recently.

This currency system is very much unlike the normal currency system and it does not have a Central Bank or central repository. Surprisingly Bitcoin economy will never come across deflation since it is not standard monetary unit of measurement of value/cost of goods, services, or assets.


For the beginners Bitcoin is surely a complex product it exists in a virtual world, and is a peer to peer currency. A currency generated through open source code with all the features of a currency. Operating in Bitcoin market requires strong technical know-how.
If you have to make an online payment the recipient company ABC will create a new Bit coin address and directs you to send it from your digital wallet which you have stored in your computer. The 2 keys are private and public key generated by the ABC company
This private key ie the Bitcoin address created by the company ABC is known to ABC only, and the public key is visible to all in that Bitcoin network. The donor has the benefit of being anonymous. The private key is signed electronically by the Bitcoin client and it can be verified by the public key. The entire transaction is broadcasted to the entire network

Bitcoin is called as a crypto currency because it uses encryption for the safe and secure transaction. This peer to peer network connects a group of computers allowing all the users to share the information visible to the group.



Chinese central bank banned financial institutions from Bitcoin transactions since the virtual currency soared in its value and investors planning for huge investment on this. People’s Bank of China has slammed Bitcoin as a currency with no meaning.

Bitcoin is growing despite of all the speculation and the first Bitcoin ATM was opened in Canada in October 2013. But this virtual currency is not free from the bugs and in March 11 2013, there was a technical block happened between node running software version 0.8 and 0.7 caused a Blockchain fork forming separate ledgers for software version 0.8 and 0.7 where the entire Bitcoin transaction all around the world is shown in one ledger. The prime and crucial difference being a decentralized currency was in question by this software issue.

The Maxed Out Report on British Debt

Borrowing more and less savings!!. The Centre for Social Justice recently released a report called Maxed Out reveals a picture of a struggling British. Low income and low savings are affecting vulnerable groups like unemployed, aged people, single parents and people with low disposable income. These people are forced to spend the majority of their income for the basic needs.

According the latest reports in 2013 the amount of national debt which Britain hold is £1.43 trillion and this is very much equal to the nation’s whole economic output indication towards life of people are going …. The growing debt is causing disputes in the family and thus it is affecting the society also.

According to this report more than 7 million people are using various credit methods like payday loans, home credits and pawnbrokers. Surprisingly 1.4 million people do not have a bank account for the transaction and they are not taking part in the mainstream financial transaction! This results in poor families giving more surcharges on goods and services on a daily basis and the cost has been estimated as £1,280 per year.

The financially backward community is buying from private lenders and they will come around 310000. The default in repayment is treated harshly by this criminal gang even though it is an offense in Britain. Each year around 130,000 people are declared insolvent, in 2012, 1.7 million were registered for debt advice. Almost all in the UK has been found in one or other kind of debt.


The borrowing also has increased since 1993 by £207 billion. As a result the outstanding unsecured debt has increased from £52 billion to £158 billion since 1993. Here are some other startling accounts

• More than 8 million household do not have any savings!
• More than 5000 people go homeless due to the rent and mortgages
• Outstanding debt on credit cards has increased three times than in 1998 and in 2012 it is £55.6 billion
• 600,000 pay day loan were taken since the buyers did not have an access to credit
• Around 7 million people use high-cost credit
• One in twelve families takes credit from unauthorized money lenders
• Number of illegal money lenders has been doubled from 2008 to 2012

Indian Vision on Healthcare

Published in Medgate Today. View it Here
http://www.medgatetoday.com/past-issues-nov-dec%202013.html

The World Economic Forum report on healthcare industry is all about its vision on the healthcare industry. The healthcare industry has tremendously grown since the last two decades especially in OECD countries it has grown beyond the GDP. This report encourages to look beyond the traditional healthcare trends and to adapt the changes which science and technology brings in. The truth is that healthcare industry is affected by the austerity measures established by various countries due to the economic crisis.

The success in the healthcare industry has given new challenges like

• Chronic illnesses
• Costly healthcare
• Prolonged treatment

Over the last 50 years the average annual rate of healthcare has grown to 2% and by 2050 the annual average cost is expected to grow by 50-100%. Healthcare system not only includes treatment and care but it includes policies, products and services which are designed for the prevention of the disease and for the wellbeing. What we need are the plans for a long term period even though a short term plans gives and immediate results but only for the time being. The gap between the supply and demand, population health and individual healthcare should be filled
.
What are the key factors that raise the healthcare costs?


• Ageing population
• Explosion of lifestyle diseases
• Rise in public expectations
• Lack of value consciousness among healthcare consumers
• Poor allocation of resources
• New therapies and technologies
• New strategies for better results

Health care System and Health System what are they?


Both terms are used interchangeably but they are two different terms. Institutions, facilities and people involved in delivering healthcare services come within healthcare systems. Whereas health system comprises of broad range of institutions and people who works beyond the traditional health sector who directly or indirectly influence the health of the society. Eg: Food and Beverages companies


Vision 2040

World Economic Forum conducted workshops in 5 countries in order to explore the possibilities of Sustainable Health Systems. The main question in this workshop conducted in China, Germany Spain, Netherlands and England was about the ideal health system in 2040?

The main concerns were

• Aspirations for the future
• Setting aside the current restraints
• Departure from traditional healthcare
• Relationship between individual and healthcare provider
• Greater patient responsibilities

All these can only be achieved through the support of media, technology, tele communications, educational and financial sectors.

Vision China

Chinese vision is healthy and harmonious society by 2040. Securing health system for nominal cost across the great cities and villages will be the target and this will be achieved through strong families, stronger communities and dedicated workers. They will target to eradicate chronic illness combining traditional and advanced medical knowledge.

Vision Germany

Germans envisage an efficient and good quality healthcare system that means a world class system. It should boost the economy as the German automotive industry. There will be full transparency in the quality and the cost of the care which they provide. Patients will play a greater role in improvement of the healthcare system

Vision Spain


The Spanish will target the eradication of lifestyle diseases. More concentration will be on the quality and safety standard across the system. They will be carrying out health literacy programs even including the children.

Vision Netherlands

The Dutch will bring up a greater healthcare system with the support of public. Through the public participation people will identify that healthcare is a responsibility and not a “right” and that will result in an effective healthcare system. Better healthcare initiatives will be rewarded. They will plan the healthcare system even to bring up export opportunities and thus boost economic activity.



Vision England


England’s values of access and equity will be reflected in national health. The healthcare delivery models will be dynamic and adaptable according to the changes in society and technology. Primary centre will be home and hospitals will be centre of excellence with skilled people. Patience will be at their discretion.

What should be India’s Vision for 2040?

India has improved a lot in healthcare but the infrastructure need to be improved a lot. There is a shortfall of around 600000 doctors in the service, lack of experts in technology, cost of the systems are the few challenges in Indian healthcare industry. Even though the child and mother mortality rate has come down we need to improve a lot here. The public is not fully satisfied with the service provided even in multi specialty hospitals. Government has to seriously see the healthcare industry and there should be strict guidelines for the operations in healthcare systems.

The Billionaire Report

The world may be frying their brain behind the economic crisis, but for the billionaires crisis doesn’t matter. The number of billionaires has increased and so has the wealth creation.Billionaires are originating from new areas but most of them are based in London and New York.

The Wealth Report by Wealth –X says that the number of people with US$30mn or more in net assets has grown by 5% in 2012 or their number is assumed to be 8,700. Over the period of the next 10 years, there would be an addition 95,000 people are supposed to be will be added to the list of billionaires with a rise of 50% in the current net asset value of US$30mn which makes the total number of billionaires to 285,665

As per the Wealth Report by Knight Frank, there will be a growth by 96% in the number of billionaires in North America from the period of 2012-2022. HNWI population will grow by 32% in same time frame. In the US itself number of the billionaires will grow by 103%.

Africa had 35 billionaires in 2012 and will have 75 by 2020 which shows a growth by 117%. There are 543 billionaires in Asia already they will grow by 119% in 2020 and number of billionaires by 2020 will be 1191. Europe will have 1115 billionaires in 2020 that is growth by 57% than that of in 2012. In the Middle East there will be 203 billionaires and 2012 there were 140. North American billionaires in 2012 are 546 and by 2020 there will be 1146 billionaires. And in the Australasian region there will be less growth by 10% 45 in 2020. Altogether there will be 4076 billionaires in the world by 2020.

The countries where most of the billionaires live is the US, China, Germany, UK, India, Brazil, Russia, Hong Kong, Indonesia and Switzerland. The main cities billionaires prefer to live is New York, London, Tokyo, SanFrancisco, Los Angeles. Belgium, Mumbai, Hong Kong, Sao Polo, Rio de Genero, Delhi, Mexico, Osaka, Shanghai and Chicago.

In terms of investments billionaires prefer to invest more in equities, cash, gold, and government bonds where as corporate bonds were chosen less

The Financial Literacy: Is it Just a Dream for Woman?

The VISA International Barometer on Women’s Financial Literacy does not give us a positive notion. The survey was conducted among the 25,000 women from 27 countries. The questions included in the survey were

Do you have and follow a household budget?

According to this survey the initiation for the budgeting of women were lower than men. Women from Brazil, the US, South Africa and Canada fared better in having and following a household budget. Women from Pakistan and Serbia found to be in the bottom of the list.. Russian and Belarus woman almost follow their budget if they have. Lack of fund found to be the main reason behind not having a budget.



How many months’ worth of savings do you have set aside for an emergency?

More than 3 months of savings were accrued for emergencies by the women in Taiwan, China and Hong Kong. They found to be more cautious about the emergency. Well, men are better in this also but only women in Australia succeeded men in this. Generally Asian women found to be more financially literate with more savings for emergencies. Women in Egypt, Serbia and Ukraine were the poorest performers in this category and the weakest in this category is Pakistan. Their savings are just an average of 0.7months expenses which kept aside.


How often do you talk to your children ages 5-17, about money management issues?

It seems only Mexican and Brazilian women are bothered about spreading financial awareness into their younger generation! They speak to their kids about 41.7 weeks on money management. The worst countries are South Africa and Indonesia. Brazilian women spend 39.5 weeks and the least bothered ladies in this category are in Vietnam; they take only 3.9 weeks.

To what extent would you say that the teenagers and young adults in your country understand the money management basics are adequately prepared to manage their own money?

Only Vietnamese women are more hopeful about the financial literacy of their young adults and the financial management capabilities. After that Indian and Indonesian women. The losers are Canada, Bosnia and the USA.


At what age do you think the governments should require schools to teach financial literacy to children, so that they can better understand money management issues?

Most women in the world think that the proper age for financial literacy classes is around 11 years. But Brazilian women suggest around 8 years and Vietnamese around 13.

The happiest countries in 2013

The survey conducted by the UN on the happiest countries has identified Denmark in the top position. The scoring was based on the GDP, life expectancy, social support, corruption and freedom. The welfare model is the key factor behind the growth of Denmark as the happiest country. According to this welfare model, pension schemes are implemented by the state, the state supports the maternity and the paternity leaves and unemployed and disabled are provided with help and benefits. The income tax is 60% and this is the same rate of interest of other social taxes. The VAT is 25%. The tax amount is distributed among the needy.

The Flexicurity which is a combination of flexibility and security focusing on the hiring and the firing system in the labor market. Job loss which is very common in Denmark is compensated with creation of new jobs. Every year around 250000 jobs are smashed and nearly 800000 people change their jobs every year. Along with frequent hiring there are various schemes training programs and free education program for the unemployed. The voluntary withdrawal from the employment may result in automatic withdrawal of unemployment benefits. These welfare benefits are with huge tax rate and the Danish tax rates are the highest in the world.

Norway, Switzerland, Netherlands, Sweden, Canada, Finland, Austria, Iceland and Australia are the toppers after Denmark. The report indicates that the happiest countries are rich countries. In these 61 countries have improved in their happiness while 41 of them has gone down. Industrial nations are not seemed to be happy for example India is in 111th place behind Pakistan. The US is in the 17th place and the countries hit by the economic crisis are found among the unhappiest.

The term Gross National Happiness was coined by the former King of Bhutan Mr Jigme Singye Wangchuck. In 2011 the UN directed its member countries to measure the happiness of the people to coin public policies.

The Remittance Report

Remittance to the developing countries has increased by 60% over the past 14 years and the center of this growth is the people from East Asia and Pacific region. By 2013 the remittance rate is expected to increase by 7.4% which makes a total of $115 billion. The EAP region has around 35 million people who have migrated to different countries. The number of female migrants is more than males.

India with $69 billion is at the first place. India is followed by China $60 billion, Philippines $24 billion, Mexico $23 billion, the Egypt and Nigeria $21 billion each. This report was released by World Bank’s Migration and Development Brief.

Remittance to the Europe and Central Asia has grown to 10.3% and will reach $43 billion in 2013 with contributions from Moldova 25%, Tajikistan 48% and Kyrgyz Republic 30%. In Latin American countries, remittance is expected to be $61 billion in 2013 which will be 2.5 % more than that in 2012.

The Syrian refugees before the current Syrian civil war were only 674000 and they remitted around $6.1 billion per year. The number of Syrian refugees by 2013 September has crossed 2 million; the largest numbers of Syrian refugees are distributed between Lebanon, Jordan and Turkey.

The remittance to Middle East and North Africa region ( MENA) are expected to reach $49 billion ie, a growth by 3.6%. As per the report of UN Population division 19 million migrants from this area are living outside this region since birth. There are 1.7 million Egyptians in Saudi Arabia, 927,000 Moroccans in France and 712,000 Egyptians in UAE. And Egypt is the sixth largest beneficiary in the world with 40% of remittance from the Middle East and Africa region.

The remittance is expected to grow by 8.8% annually for the next three years then reaching $515 billion by 2015.

Government Shutdown and Obamacare

Government shutdown is a situation where Congress fails to pass authorization for the funds which is sufficient for the administration. What is the reason for the current shutdown? It is Affordable Care Act (ACA) or The Patient Protection and Affordable Care Act (PPACA) which is better known as Obamacare. And why the Republicans hate Obamacare? The truth is that no one dislikes the plan but it came through Mr Obama and that is the foremost reason for the hatred. In Reuters/Ipsos poll says most of the republicans support many provisions of Obamacare but the way Mr Obama and his ministry conveyed was wrong

Few provisions of Obamacare:


• Creating an insurance pool where small businesses and uninsured have access to insurance exchanges to take advantage of large group pricing benefits
• Providing subsidies on a sliding scale to aid individuals and families who cannot afford health insurance
• Requiring companies with more than 50 employees to provide insurance for their employees
• Allowing children to stay on parents insurance until age 26
• Banning insurance companies from denying coverage for pre-existing conditions;
• Banning insurance companies from canceling policies because a person becomes ill
• Expanding Medicaid to families with incomes less than $30,000 per year


This shutdown will be alarming since the US is hitting its debt ceiling by October 17. This factor can add an advantage to the Republicans who is waiting to derail the Obamacare as well as Mr Obama. The shut down may force the Democrats to accept the GOP way since the country doesn’t have the reserve to carry on with the administration. But the last Wednesday meeting didn’t give any signals of relaxation from Mr Obama’s side but he emphasized on simple stopgap funding bill to reopen the agencies.

Results of MasterCard Survey 2013

The MasterCard Financial Literacy Index brings in a lot of surprises about the financial literacy rate of various countries. The survey conducted among 12,205 respondents aged 18 – 64 in 27 countries across Asia/Pacific, Middle East and Africa (APMEA) between April 2013 and May 2013.

As per the survey New Zealand is the most financially literate country in the Asia Pacific region. Second comes Singapore and Taiwan is third in Asia Pacific Region. This survey had three components and separate results were generated on the base of these three.

In Basic Money Management New Zealand scored 77 points came as the top place Australia got the second place with 75 points. Third place went to Singapore. In this segment the worst performer is India that too in the last place with 50 points which is 5 points lesser than 2012. This result is solely for Asia Pacific Region.

In Financial Planning the small country Myanmar topped the first place with 88 points they remained in the first place last year also. Taiwan came second with 83 pointsbut the worst performers in financial planning is surprisingly Japan with 68 points like last year. This is just for Asia Pacific Region. The countries who improved are Bangladesh, Thailand, India, China, Australia and New Zealand.

The countries that did well in an investment segment of Asia Pacific Region are Thailand, China, Australia, New Zealand and Hong Kong. China comes first in the list and Hong Kong second. The worst performer in this segment is Myanmar.

In APMEA Region financial literacy rate is highest in New Zealand however surprisingly Japan is the lowest financial literate country below India. In this study countries from Asia Pacific Region were included.

The Chancellor is not for Experiments!

The lowest rate of unemployment in the last 2 decades could be the real reason which helped Ms Angela Merkal to win the current elections as Chancellor of Germany for the consecutive third term. Her party, Christian Democratic Union won 41.5% votes against 25.7% votes of Social Democrats led by Mr Peer Steinbruck. But she is still in need of a coalition since she doesn’t have an absolute majority.

The Chancellor seem to be the pet of Germans since she satisfied them with her strict measures she took on Euro-crisis, Libyan war, Syrian uprising. Her “ NO WAR” attitude was visible when she send a small troup of 8000 to Afgan rejecting the criticism of her allies and to keep an ok bilateral relationship with the US.

She has shown her commitment towards her country by not giving away for the bailout demands of other European countries like Greek, Spain and Cyprus. She called for strict austerity measures in these countries which truly affected not only eurozone but other countries as well.

Ms Merkal holds the blame for increased burden on these countries but her measures are for the future not for the present. That’s her view. For eg the merchandise exports from India to Europe declined from $42.7 billion in 2011 to $37.3 billion in 2012. But the current account in eurozone got a growth from $100 billion deficit to a $300 billion surplus.

There are worries also. The amount of the debt Germany has is € 2.1 trillion. This has affected the growth of many federal states, municipalities and cities. The other main issues which can be a trouble for her government are:


Debt Sharing

The idea of euro bonds under which 17 European countries share their debt will be rejected by the new government. Germany may not be interested in buying new bonds which is capable to make poor countries to borrow cheaply. Greens Party , the supposed coalition partner is in favor of buying bonds and this can create a tension inside the ministry.

Growth

Ms Merkal already carrying the blame on her for not funding crisis hit countries like Spain, Greece and Cyprus. The European Central Bank has already designed few
measures to help these countries.

Troubled Banks

Zombie banks all over the Europe need restructuring and setting up European Union wide agency was not appreciated by German Finance Minister Mr Wolfgang Schaeuble till now. This will be a crucial issue during the current term.

Third Greek Bailout

Greece is in need of 11 billion euros to cope up with unemployment and related issues. The old 2 bailouts were about 240 billion euros.

Throughout the next four years she will be scrutinized for ger unfriendly attitude to other countries and specifically towards the eurozone. But her loss in the lower house forces her to be in a coalition with rivals who will force her to keep a friendly rapport with the neighbourhood.

G 20 on Shadow Banking

The recent G20 meeting ended with a strong affirmation of regulatory functions on the top banks. The control on NBFC s has great importance since the bankruptcy of Lehman Brothers was the first indication of global economic crisis of 2008. The G20 leaders have given lots of attention on the issue of shadow banking and they have taken a decision to strengthen the regulation over the shadow banks.

In the roadmap document to regulate shadow banks, International Organization of Security commission (IOSCO) will analyze the global hedge fund sector to the Financial Stability Board (FSB). FSB, the international body to monitor and recommend about the global financial system was established soon after G20 summit in 2009. Based in Basel, Switzerland the board members are G20 nations, FSF members and the European commission. FSB provides regular monitoring of shadow banking services. There are various procedures assigned to FSB and IOSCO, to keep the services of NBFC is on track.

In the G20 preamble the 62nd point is all about shadow banking regulation and in that it says that the G20 group is implementing a wide range of policies to correct the global economic crisis by ensuring the financial institutions, markets and the participants are working in a regulated environment.

The shadow banking sector is around $60 trillion among that $30 trillion is in the Europe itself. This year witnessed a huge credit bubble in China because of the shadow banking. Chinese overall credit grew from $9 trillion to $23 trillion in the five years since 2008, the Lehman collapsed. The shadow banking in the US shows the signs of shrinking since 2010 for eg: the size of repurchase agreements is down by 3% to $1. 60 trillion.

Capital Flights: A Fact

Bovespa going down by 18% in June 2013 indicates a lot when you read it along with the report that the Brazilian IPO s has given only losses to its investors since 2005. The rapid capital flight is keeping the country on the verge of a breakdown and internal issues as we witnessed during the Confederation Cup series. This is even influencing the global markets.

As per June 2013 reports investors have pulled $1.5 billion out of emerging market bond funds. Brazil’s primary budget balance went down these years and the reasons behind the capital flights could be the excess domestic credit, and high loan-to-deposit ratio of 1.6. Brazilian banks which benefited from the once capital inflows are affected by these outflows, even the metal and mining sector are under threat.

Investors foresee a hard landing of Chinese economy and the most capital flights are feared to occur by late 2013 and early 2014 and people are careful about the failing forecasts. As the Fed tightens the measures Chinese economy is likely loose more capital even though they keep their currency undervalued. Looking at this situation IMF, in its July update has warned China on this capital flight on the backdrop of Chinese government deciding on opening capital accounts and allowing the Chinese to invest in securities abroad.

An amount of $71 bn will be taken out of Russia in 2013 according to the reassessment done by The Russian Ministry of Economic Development. In 2012 the amount of capital exited from the country was $56bn.

Ailing Indian currency is affected by the massive capital flight which country witnessed late August. The RBI data say FDI worth $7.6 billion was invested in between April and June 2013, but at the same time $11.2 billion flowed out of the country. Finance Minister is expecting more and more FDI but the capital flight remains unsolved.

Major Capital flights

The phenomenon of capital flight is not limited to these countries but it is omnipresent.
In 1998 Indonesia went through a capital flight which made the country unstable. The 2009 UK capital flight was due to the tax laws. The capital flight in 2006 from France that too on the base of reviving tax laws are the major capital flights than which happens in the Euro area especially in Greece and Spain.

Major Challenges for Mr Raghuram Rajan the new Central Banker in India

North Block vs. Mint Road

The home of Union Finance Ministry in North Block and the RBI HQ on Mint Road will have much more communication in the coming days. After the new RBI chieftain steps in with Himalayan tasks his prime duty should be satisfying the North Block which is answerable to the general public at many fronts. The political circle in Delhi never comes under the jurisdiction of the RBI chief and they may not be interested in understanding the worries of common man. So the toughest task will be keeping the balance between Finance ministry and RBI

Strengthening Rupee

Uplifting a currency which has gone down by 12% in the current financial year can’t be defined just as a tough task instead this is an uphill task. This depreciation does not purely depend on country’s internal and the external issues are not in the control of policymakers as well. The massive stimulus withdrawal has put not only India but all the emerging economies growths at stake. The RBI chief is not a policy making authority and he can’t design or execute programs which inject liquidity into the system. Various issues like dependence on foreign energy, the invasion threat from China, exports and imports, broadening of tax polices, infrastructure program are not at his say.

Curbing Inflation

Mr Raghuram Rajan who was the chief advisor to the Finance Minister has performed the duty of the Chief Economist of IMF is the man who predicted the economic crisis of 2008 way back in 2005. In 2012-2013 the fiscal deficit was slashed down to 4.9 % of GDP from 5.8% of GDP in 2011-2012 by the Finance Minister. Until May 2013 this plan was functioning well by stabilizing rupee, controlling inflation, and even an RBI interest rate cut was boosting up industrial segment. An extra $20 billion was invested in Indian equities but the slowdown in QE easing by Fed Chairman made everything go wrong. Raising the interest rates is a solution but the slow growth of the economy may not support the high interest rates especially the business establishments. Recently The Confederation of Indian Industry has demanded again fro interest rate cut from RBI. How new RBI chief will execute his plans to halt the inflation is a question.


More Bank Licenses

Opening new banks and starting branches all over the country and eventually lowering the percentage of assets which banks have to hold in government securities. This is another challenge and this plan may have severe consequences for farmers and small to medium – sized business. The main challenge lies in the risk behind finding proper banks.

In the press conference Mr Raghuram Rajan cleared his intentions by telling. “Some of the actions I take will not be popular. The governorship of the central bank is not meant to win one votes or Facebook ‘likes.’?” This proclamation itself is an indicator for his reformative plans.

An Analysis of safe and worst currencies in 2013

When Rupee is kneeling down in front of the dollar, it would be interesting to probe into the other currencies which have already lost to the dollar and to pound as well. Along with that we will find the best currencies in 2013 which can give great returns on investing.

Iran Rial tops the list of the least valued currency. Introduced in 1798 as a coin Rial got its name from Spanish Rial. In 1945 Iran made USD as the peg for Rial leaving Pound and then 1USD was 32.25 Rial. The dollar devaluation in 1973 was not followed by Iran and the 1USD was 68.275 Rial. The value of the Rial declined due to the Islamic revolution and related capital flights and in 1999, 9430 rials equaled one dollar AND AS PER August 27, 1USD equals 24820.00IRR.

As of today 1USD is equal to 21,170000 VND, Vietnamese Dong when 1 GBP is equal to 32,910.8820 VND. Vietnamese Dong, the currency of Vietnam since 1978

Lesser known country São Tomé and Príncipe an Island nation situated in Gulf Guinea is the second smallest African country. Its currency Dobra was introduced in 1977 is the third least valued currency equaling 1 USD to 18325.00 Db. The country is planning to raise the value of its currency and for this purpose it has entered into a treaty with the Portuguese in 2010 to link Dobra with Euro.


The main tradable currencies are Japanese Yen, GBP, and USD obviously but South African Rand is considered to be the most tradable currency despite the collapse in emerging economies. South Africa Central Bank is a private entity and the 600 shareholders own less than 1% of outstanding shares. When translated to dollar pips the SAR equals to an average daily in GBP. That itself makes SAR most tradable against the USD.

The Australian Reserve Bank works towards target inflation of 2 to 3%. They have met this target nine times throughout this year. They even offer one of the best interest rate in global markets.

The Canadian Dollar is sound with low and stable inflation is considered as a safe and secure currency due to the efficient management by its Central Bank Even though an independed entity BoC is some times treated as a corporation like Swiss National Bank CAD is traded on a daily range of 30-40 pips

India in Stagflation

This could be temporary and let it be…….. That’s the expectation which Indians keep when their currency weakens. As Mr Paul Krugman in his latest blog “Ruppee Panic” describes, let us also generalize that currency weakening phenomena is there in almost all emerging economies. He invites our attention to the Brazilian economy where the fluctuations are more severe than India. The Brazilian inflation rate is marked as 6.7% which it difficult for the government to execute the development plans .

It will be interesting to know who lost how much on this rupee dollar war in India. Mr Mukesh Ambani who is the owner of Reliance Industries Ltd. (RIL) the biggest refinery complex has lost $5.6 billion of his wealth since May 1 and his younger brother Mr Anil Ambani lost $1.3 billion. The second biggest loser is Mr Dilip Shanghvi, founder of Sun Pharmaceutical Industries Ltd and his loss is $2billion! Mr Kumar Mangalam Birla had a loss of 950 million; he is the owner of Aditya Birla Group.

The current situation in India is defined as Stagflation (a mixture of stagnation and Inflation) The RBI On Tuesday night announced that it would purchase Rs80bn of long-dated government bonds and execute further measures to lessen the pressures on Indian banks, whose forecasts were badly affected by the measures introduced to protect the rupee.

The Indian government doesn’t see any other way to come out of this crisis than inviting maximum foreign capital to the country. The production decreased to 10.4% compared to the last May. The ideal strategy is to increase the budget deficit to tackle this situation as Mr Pranab Mukherji did in 2008 but the present finance minister is unable to do since the inflation rate is at a high of 5.79%. RBI can’t reduce the interest rate because it will affect the foreign capital inflow. Another threat is the fear of an exodus in foreign investment in India since the majority of the foreign fund is invested as short term funds. If the panic of the rupee goes high the investors may withdraw them.

The Future of NPL s in the US and Europe

Despite the slowdown the NPL markets in the US and Europe is giving ample investment opportunities. Between the US and Europe latter is becoming the favorite for the investors. The transactions in the NPL markets have increased through 2012 and the banks are keen to sell their NPLs.

According to the January 2013 reports, US bank deposit rates fell down mainly due to the US senate’s failure to extend the TAG program which was a component of the Temporary Liquidity Guarantee Program of FDIC which was originally adopted in October 2008. Through this program lending became easier due to the reduction in cost of funding and lending became more viable and helped people to mend their businesses. The main components of the TAG were1) Debt Guarantee Program which temporarily guarantees all newly-issued senior unsecured debt up to prescribed limits issued by participating entities. 2) The Transaction Account Guarantee program gives a
Temporary full guarantee by the FDIC for funds held at FDIC-insured depository institutions in non-interest-bearing transaction accounts above the existing deposit insurance limit.

By December 2012 NPL s held by lenders were US$164bn in the distressed loans. In order to keep the value of the shareholders more than 7000 US banks are getting ready for the merger and acquisition. Consolidations also play a vital role in increasing the number of investors into the NPL market.

The sales of non performing CRE (commercial real estate) loans in the US fell down to US$15 billion in 2012 from US$26 billion in 2011. The sales of non performing
CMBS (Commercial mortgage-backed securities Commercial mortgage-backed securities) loans will be active from 2013 onwards.The decline in the unemployment rate and the stable growth will boost the demand for space in commercial properties.

Europe’s non performing loan market worth $10 trillion is showing vital signs of growth than the US. Investors are finding Europe the right place to invest. In order to be stable the European Banks have to refinance or sell NPLs worth €700 billion. Till January 2013 banks have sold NPLs around 20% to 25%

The Ernst and Young report on the NPL predicts that the German banks which made 3% NPLs last year will make only 2.8% NPL. And the rest of the Eurozone will get a rise in NPL sales to 7% Towards the end of 2012 German banks had NPL worth €200 born and due to the increased NPL sales the NPL in 2013 is expected to decline to €183 bn. Spain owns €190 being distressed loans, but not attracting too many investors. The other two countries investors target is the UK and Ireland.

Rise of the BRICS Middle Class

An enormous upsurge in the middle class families across the globe especially in the BRICS countries has accrued high supposition among the economists. The total number of such families in BRICS is considered to be 5 billion by 2030. This transition has been found as "historical" in the last 150 years by the UN. This data is supposed to exceed G7 countries which are significantly industrialized than BRICS.

By the end of 2020 middle class families in Asian continent will be more than 3 bn and this is 5 times more than Europe and 10 times more than North America! The households which are capable of spending $10 to $100 per day from their disposable income is considered to be in the middle class group and this definition has been coined by the UN and OECD.

The number of people who earns $10 to $100 per day approximately is 150 mn and by 2030,500 mn people will earn the same in China alone if the economy has a stable growth. This data implies that by 2030, 70% of the Chinese population will be added to this middle class group. In India with the current 50 million middle class families an extra 150 mn families will be added to the middle class group by 2020.

As the number of such families increases a price hike in the commodities is also visible since more people are looking for resources. For e.g. the price of meat and meat products has gone up by 20% in the last 5 years. Now the companies all over the world are busy setting up their outlets in these BRICS nations looking at the opportunities the middle class families are going to bring .

The FDI Failures in India

The repeated failures of FDI may hamper the economic growth and may work against India’s reputation from being an investor friendly country. This emerging economy is witnessing a deleterious “Quit-India” movement of foreign companies making slowdown in furtherinvestments. India is in need of FDI to overcome the huge account deficit equal to 4.8% of GDP in the last fiscal year. The recent regulation by Indian government allows 100% foreign ownership in telecommunication companies and easing in various overseas investment segments to attract long-term investments.

The strong discontent over the macroeconomic conditions, market and regulatory conditions and the rupee’s instability led the UK company 3i’s exit from the Indian infrastructure business. The whopping amount of $1.2 bn investment couldn’t gain a sound profit which made the company analyze running this business in India is very challenging which resulted in the shut down in May 2013 even though 3i were the world’s largest India- dedicated fund in the infrastructure industry.

L&T Finance Holdings signed the deal with Fidelity Investments US to buy Fidelity’s mutual fund business in India in March 2012. The Company had Rs 8,800 crore worth assets invested in India when they decided upon the closure. Based on their analysis the Indian mutual fund sector is unattractive and Fidelity was one of the earlier entrants to the Indian Mutual fund industry suffered loss ever since they started in 2004

Telecom Company Augere Wireless, UK won the Broadband Wireless Access (BWA) spectrum in 2011 October and they exited in May 2012 blaming it on regulatory uncertainty. The disdain was on the TRAI regulations on re-auction, high prices, lack of clear cut telecom policies and Supreme Court’s cancellation of licenses which led the cancelling the investment plans worth Rs 270 crores


China Light Power (CLP) and AES Power were the strongest foreign companies in the Indian power industry along with small players like E ON, and GDF Suez. Among these CLP shut down thermal plants and moving forward only with renewable energy programs. AES Power having presence in more than 20 countries couldn’t get a mileage , shut down the operations in November 2011 and it is to be noted that they invested in India in the year 1993. The environmental issues, scarcity of funds, fuel shortages, issues with local landowners and non the cooperation of the state electricity boards are the factors which made AES Power’s pack up and the same reasons are told by E ON and GDF Suez.


RBS with 31 branches and comprised total assets of 190 million British pounds as on September 30, 2012 were forced to shut down 23 of their branches in May 2013, Morgan Stanley sold their wealth management unit to Standard Chartered Bank in May 2013, whereas UBS AG Switzerland surrendered its banking license in June 2013………..All these exits were on the basis of regulatory uncertainty and unclear policies.

South Korean company Posco and Arsenal Mittal , a Luxembourg company left India in 2013 July after creating so much of confusion. Arsenal Mittal lost Rs 50,0000 crore in investment and Posco lost Rs 30,000 crores.

As per the official report India lost nearly Rs 1 lakh crore in investment and 21% fall in FDI to $36.9 billion in 2012-2013 fiscal year where as 2011-2012 fiscal year closed with $46.6 billion FDI. Meantime the FDI flow to China was $111.6 billion in 2012

FDI Flow an Analysis

As per the UNCTAD report on Global Investments, FDI for 2013 will remain almost the same as it was in 2012, $1.32 trillion with an expectation of 10% hike. Transnational corporations are expected to invest cash holdings in various areas. From $1.45 trillion of FDI in 2013 is to expected to go up to $1.6 trillion in 2014 and $1.8trillion in 2015. This growth will be subject to the changes in the global financial system along with the significant policy uncertainty. The proposed FDI recipients will be the developing economies than the developed ones.

Africa which has registered a year-on-year growth shows a rise in the FDI inflow up by 5% making it $50 billion. The outflow in the FDI also has risen to $14billion in 2012. Africa the favorite investment destination for the developing countries like India, Malaysia, China and South Africa in terms of FDI stock.

The extractive sectors in Mauritania, the newest oil producers in the Africa, Democratic Republic of Congo, Mozambique and Uganda are the major places where emerging economies invests. Other than extractive sector consumer oriented manufacturing sector also saw a growth in FDI inflow.

The whole of 2012 witnessed a decline in the flow of FDI in Asia from 7% to $407 billion which was much evident in South Asia where the FDI flow fell down to 24%. Among the top 20 FDI recipients China was third and Hong Kong was fourth other Asian countries including Singapore and India is also in this top 20 list even then the FDI inflow declined. The FDI inflow in East Asia and South East Asia was moderately increased but the decline in the South Asia hampered that too. Outflows from the region showed an increase in which Chinese outflow was $84 billion in 2012 whereas Turkey the main investor with 73% growth in outflow ie, $4billion in 2012.

FDI inflow in the Latin American and Caribbean in 2012 was almost the same as in 2011 which was $244 billion. The rise in FDI to South America caused a decline in FDI inflow to Caribbean and Latin American countries. Rapidly expanding middle class, natural resources including oil and natural gases are the main attractions of South America. FDI outflow in the Latin American and the Caribbean region witnessed a decline to $103 billion.

The rise and fall of Detroit and their revival plans

General Motors Corporation which is one of the biggest automakers in the world headquartered in Detroit. Ford Motor Corporation also headquartered in Detroit with 213000 employees worldwide in their 90 plants and other facilities. Chrysler Group, which is located in Auburn Hills Michigan has their Historical Services in Detroit, which is considered as the one among the Big Three (Ford, General Motors, and Chrysler) in the US

Visteon Corporation which manufactures automotive parts , SBC a telecommunication company, healthcare companies like Trinity Health, Henry Ford Health System, pharmaceutical company Pfizer Inc, systems technology company Delphi Corporations, global shipping company FedEx Corporation, cable network company Comcast and the list go on. Even then Detroit went bankrupt!

The city of Detroit in the State of Michigan, home for many MNCs filed for bankruptcy protection, that too after a long economic crisis. And the reasons include 1) decline in the population since 2000 to 26%. 2) Unemployment to 18.6%. 3) Tax revenue lowered affecting the city services. 4) Exodus due to high crime rates. 5) Mismanagement by its Democrat government ruling since 1962.6) The global decline in the automobile industry7) Freeway construction combined of demolition of houses and industrial buildings8) Illiteracy about 50% poverty of 60% among children, racism which led to the 1967 riots, from 2000 to 2010 Michigan lost 48% of manufacturing jobs.

What are the revival and reinvestment plans?

The City has already designed a plan for the restructuring which could save $200 million per year but just like austerity methods this plan will surely impose more restrictions and burdens on the residents and the workforces.

1) Job cuts which makes 2, 700 unemployed people but it resulted in annual savings of $100million
2) Implementation of City Employment Terms and thus to reduce labor costs
3) The renewed CET may result in savings worth $102 million annually
4) More initiatives to increase the revenue
5) Reduced operating costs
6) To defer the capital expenditure
7) Demolition of vacant structures
8) Executing Consent Agreement of Financial Advisory Board
9) Appointing Emergency Manager

Reinvestment Plans

The main investment will be in Public safety, mainly in the police department to make a reasonable reduction the high crime rates which has made Detroit an unsafe place for peaceful living. Another area which massive investment going to take place is Fire and EMS( Emergency Management Services).

Countries Trying Luck in The US Debt : An Analysis

The clock ran out of digits in 2008 when the US national debt exceeded $ 10 trillion! It was installed by a New York real-estate developer Seymour Drust, showed the amount of the $16,738,230,684,008.83 debt as per Monday July 15th. It will be interesting to know which all countries are supporting the US with credit.

The top rank goes to the US itself and you know how? It has taken $263.8 billion from its own insurance companies,the US savings bond are about $183.8 billion, mutual funds of $889.1 billion, $615.6 billion from pension funds, State and local government pension funds worth $190.3 billion, $492.2 billion from State and local governments, $337.4 billion from Depository institutions and it goes on like that. The below account is excluding this data.

The Chinese agenda of keeping Yuan weaker against dollar boost up exports creating more job opportunities for its people by lowering the demand for the US products. As of March 2013 China owns $1.250 trillion of the US debt, which is 22% of the entire debt amount of $5.6758 trillion of the debt owned by other nations. They buy more treasuries when dollar value falls makes the more demand of dollar. Being the prime banker for the US, China's threats of selling debt will affect the US as in 2009.
The second largest foreign creditor to the US is Japan as it holds $1.12 trillion of the US debt but Japanese own 95% of the Japanese debt. In Japan public debt is 219% of GDP. The updated news says that Japanese investors are selling off the US treasuries and the month of May saw a sale of $30 billion and in the month of April it was $15.5 billion!

With $253.4 billion in the US Treasuries Brazil becomes the fourth biggest lender to the US. Brazil's the 6th largest economy has attracted aggressive investment by many countries including other major economies. The Center for Economics and Business Research recently listed the ten largest economies in the world shows the U.S, China, Japan, Germany, France, Brazil, UK, Italy, Russia and India to be those countries where Brazil supplanted UK to be the 6th largest economy.

The oil exporters together get the fourth place as the lender to the US but country to country report gives Taiwan the next place after Brazil. This Asian Tiger group country has seen an economic boom with industrialization in the later half of the 20th century. The economy is export driven and the main locations are US and Europe. Taiwan holds $196.6 billion of US debt.

The secret banking facility in Switzerland play as the main factor in owning $192.7 billion in the US debt which is not a surprise because 27% of the world's assets is invested in Switzerland and this country is behind Taiwan in the list.
Russian President Mr Vladimir Putin called the US a parasite on the global economy during the Russian presidential election campaign in 2011 ... Russia knows better!!!!!!!! He clearly stated that the US is living beyond their means and blamed the systemic malfunctions in the US. Russia own $162.9 billion of the US debt which shows they have to lose much due to default but nothing scares Russia, not even the debt-ceiling debate as Russia increases the debt amount by billions. And Russia is in the 6th place.

Luxembourg which has the 7th place is comparatively a small country owns $144. 7 billion of the US debt! This country follows the tax pattern of its neighbor Belgium that makes Luxembourg an investor friendly country.

The secret accounts in Swiss Banks might be popular got changed by the Belgium government but still, banking in Belgium is preferred by the world due to the tax breaks and other benefits provided to the investors for its offshore accounts. This tax break makes Belgium being the biggest purchaser of the US debt and as per January 2013 records Belgium owns $143.5 billion of the US debt. But Belgium bank acts as the custodian for the offshore investors and the US treasury doesn't track the nationality. Belgium ranks 8th.

Hong Kong exports the biggest brands to the US and the US exports diamonds, aircraft, and telecommunication to Hong Kong etc. Despite being part of China, Hong Kong's economy is open and has a close association with US, with fair amount invested in the US debt and the US dollar is the most stable reserve in the world. The world's central banks have saved around 62% of their money in dollars! Hong Kong owns $142.9 billion US public debt by the records on January 2013 is placed 9th.

Future of the Woman Employment

Woman power is supposed to gain control over the global economy, politics and society in the next 5 years and the global income rate is growing enormously from US $13 trillion to US $18 trillion in the next 5 years. The role of the woman will become vivid as entrepreneurs, producers, consumers and employees with the population increase in China and India.

Woman will control 75% of the spending by 2028 as the global income of woman increases. The rise of the global income will directly impact with the GDP growth of China and India and US$5 trillion will be contributed from these countries.

The entire world is accepting the changes and it has even caused a revolution in male dominated economies. The Women Suffrage Movement which started in France in 1780s and 1790s resulted in many countries giving them that right in the latter half of the 19th century. International Alliance of Women founded in 1904 in Berlin campaign mostly for woman’s suffrage and represents the in 50 countries.

The European Commission in 2012 designed legislation with the purpose of placing 40% of woman in non - executive boards of publicly listed companies by 2020. Around the globe woman are earning US$ 12.1471 trillion which is forecasted to be US$ 16.7015 in 2014! More than half of the private wealth in the US is controlled by women with 80% of purchasing decisions are made by women too. In OECD countries 44% of civil jobs are held by women.


Despite of these progress the salary gap between women are 15% lesser than men which shows that the pay gap exists. A similar gap exists between the number of female and male entrepreneurs in 58 economies out of the 59 economies, only Ghana is an exception with 50% more female entrepreneurs than that of male entrepreneurs whereas South Korea a strong US ally with 20% lower female proportions.

The recent Harvard Business Review stated that the equality in the rate of men women employment can increase the GDP of the US, Japan and Egypt by 5%, 9%, and 34%, respectively. This review said that women and underutilized. In Saudi Arabia 57% of woman are graduates but their participation in the workforce is just limited to 12%. In India more women is worried about their safety, despite of this obstacle 5.5 million women start the employment every year.

In Europe Italy showed the second lowest female labor participation. While in Japan only 43% of women are trying to rejoin after maternity. It will be surprising to know that the US doesn’t support parental leaves with income. According to Tanzanian tribal laws only sons can inherit the land but the country has around 1.2 million women entrepreneurs. In South Africa a woman employee can get maternity leave only if she has continued working with the same company for the last two years.

A Summary from WEF Gender Gap Index 2012

The World Economic Forum started its efforts to capture the dimension and the impacts of the gender based disparities in 2006 and they released the latest report on Gender Gap in October 2012. The report aims to create awareness about the challenges which gender gaps create and on the possibilities by reducing these gender gaps.

The basic concepts that constitute the Gender Gap Index are 1) Measuring gaps 3) Gaps in Outcome variables 3) Ranking of the countries based on the gender equality. The Global Gender Gap Index has been divided into four sub indexes to examine the Gender Gap more effectively they are: 1) Economic Participation and related opportunities 2) Educational Attainment 3) Health and Survival 4) Political Empowerment.

The Scandinavian countries held the top positions in this index as the same as in 2011. Iceland, Finland, Norway and Sweden are the first four countries in the Gender Gap Index which successfully closed 80% of gender gaps. These high-income economies have distributed the resources and opportunities equally between women and that became a reason for their gender equality. They achieved the literacy level of 99-100% many decades back, the level of higher education has increased and that makes women as the majority of the technical work force even the salary gap between both genders is the lowest in the world.

The Scandinavian countries were the first countries to give right to vote for women Finland in 1906 Norway 1913, Denmark, 1915, Iceland 1915 and Sweden 1919. In 1970s Denmark, Sweden and Norway introduced voluntary gender quotas due to this policy these countries have the largest number of women politicians. Sweden ranks first with the largest number of women parliamentarians in the world which is 44.7%.

From Asia, Philippines rank in the first place in health, education, economic participation and political empowerment. They even closed the gender-gap in education and health in 2012. Among the Middle East countries, Israel ranked at the 50th place with a higher than average performance in economic participation, political empowerment, and opportunity.

The UAE is the only country from the Middle East which has closed the education gap. The decrease in earned income and women in parliament affected the rankings of the UAE which was in the position of 107. Kuwait, Bahrain and Qatar were ranked at 109, 111 and 115. The overall ranking of The United States of America was at 22nd with 8th rank in economic participation and opportunity, 1st in educational attainment, 33rd place in health and survival, 55th place in political empowerment

The Aftermath of An ArabSpring

The unemployment rate of 13.2 % has certainly a big role in the ouster of Mr Mohammad Mursi from the chair of Egyptian President. Mr Mursi who assumed office on 30 June 2012 granted himself unlimited powers to legislate without judicial review and supervision resulted in 2012 Egyptian Protests.

The economic growth of Egypt is stagnant for the last 2 decades and the situation of the country is not favorable for any foreign investments or any growth in tourism which is the main source of income for Egyptians where 12% of Egyptians work for. This sector alone provides $11 billion to the growth. .

A report in  May by the UN says that the period of 2010-2012 witnessed increased food insecurity and poverty, where 17% of the population doesn’t have sufficient food which was 14% in 2009.

Mr Mursi who was the first elected President in Egypt had kept the agenda to reduce unemployment below 7% during his election campaigns. The unemployment among the population under 30 is 80% where poverty rate is also high which makes 2 of every 5 Egyptians live on less than $2 per day.

The foreign exchange reserve has reduced to 60% due to the lessened activity in tourism and foreign investment sectors; growth rate has plunged to 3% and since the beginning of 2013 Egyptian Pound faced a drop less than 8% which made 7Egyptian Pounds/1US$. Parents are forced to pull kids from the school due to the rise in fees due to the devaluation in the Egyptian Pound.

The first 4 months of 2013 witnessed jump in food prices to 10%! The discussions between Egypt and IMF for a fund of $4.8 bn didn’t get materialize. This fund could be a boon for support for public finances and in this current scenario IMF is careful about taking up this risk.

Egypt got foreign reserve support from Libya ($2billion), Qatar ($3billion), and Turkey ($1billion) of $2billion budget support package. Mursi government was not willing for the regulations put forward by the IMF which delayed the discussion over the fund.

Is EU Accession a Remedy for Croatian Crisis?

The nuptial knot is now tied between the EU and Croatia after a decade long betrothal which was described as “painful discussions” by the President Ivo Jospovic. Entry to the EU in the strangest times has generated so much of assumptions among the economists in the world. Croatia will be the 28^th member of the EU after Bulgaria and Romania becoming members in 2007.

EU commission was very careful in accepting Croatia as a member and they werCroatia was  served a warning to control the corruption which is widespread in the country which makes Croatia the 2^nd place in most corrupted countries in the Europe behind Slovenia. The corruption even led it’s former President Mr Ivo Sanader, who was the mastermind behind the EU accession procedures, to jail on a corruption charges of €5 million as a bribe from various institutions including a bank and a pharma company!

Croatia has an unemployment rate of 20% along with the threat of corruption and human trafficking. Became an independent country in 1991, Croatia is in severe economic crisis in the last 5 consecutive years. Many economists foresee a chance of Croatia opting for a bailout immediately after its EU entry as a solution for its crisis. But this was denied by Mr Croatia’s Foreign minister Mr Vesna Pusic. The European parliament even made an announcement through its President Mr Martin Schulz that EU membership will not be the solution for Croatian Crisis.

Advocates of this accession find peace in the forecast that the double digit unemployment rate can come down as the Croatians finding jobs in prosperous EU countries and with the help of foreign investments Croatia’s economy will definitely recover. They keep faith in the EU leadership based in Brussels that they will keep check on the corruption and administration in the country.

In the late 19^th century Bismarck predicted issues among the Balkan countries will cause the next European war. Croatia has vital issues like rising debt, more risk of defaults, which can be a burden on EU taxpayers. Croatia, which has lost a huge number of its population in the wars including the war Against Yugoslavia is surely looking at this accession to be a long-term solution for their all kind of problems.

Some Confederation Cup Related Thoughts

The Brazilians may dislike this, but the football fans worldwide are waiting eagerly for the final on June 30^th. Violent protests were inefficient to suppress the football fans and FIFA from holding the match in Brazil. The FIFA headquarter in Zurich went ahead with its decision of Confederation Cup venue being in Brazil who are also the defending champions. The Secretary General for FIFA Mr Jerome Valcke clearly opposed Brazil sports minister Aldo Rebelo’s revelation that so many other countries has expressed the willingness to be the host of confederation cup 2013 in an open stage.

Divided into 2 groups A and B, the host country Brazil came out to be the first semifinalist by beating Uruguay for a 2-1 rate. The next semifinal is going to be between Spain and Italy and the world is waiting to see whether the bullfighter’s race ahead or Il Canto degli Italiani will be played.

The highlight of this Confederation Cup was Team Tahiti group B member winners of the OFC, getting highly appreciated even though they were beaten up by Spain for a tremendous score of 10-0. This is the record victory in the history of FIFA and the earlier record was in the name of Brazil taking over Saudi for 8 -2 in 1999 semi finals.

Among the semifinalist countries other than Uruguay all the other 3 countries are hit by recession but their football spirit is alive even the midst of this recession. Football being the national sport of Italy, Uruguay, Brazil nothing can quench the zeal for this sport in these countries. Bullfighting may be the national sport of Spaniards but football being the popular sport no one can write them off in this game

Looking at the Olympic history, Italy won the Olympic football Gold in 1936 Berlin and this is the only Olympic gold in Italy’s name for football but they have won gold in World cup in the years 1934, 1938, 1982 and 2006

 

The Spaniards won the World Cup in 2010 and they were winners in the 1992 Barcelona Olympics, they were runners up in the 1920 Olympics held in Antwerp, Belgium and in the 2000 Sydney Olympics as well. Brazilians have much advantage in Confederation Cup as they were the winners of 1997, 2007 and 2009 Confederation cup matches. Amazingly they never won any Olympic gold but remained runners up in 1984 in Los Angeles, 1988 in Seoul, 2012 in London. In the 1958, 1962, 1970, 1994, 2002 world cup matches they won the gold.

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Uruguay may be out of this Confederation Cup but they were the Olympic gold medal winners in 1924 Paris and 1928 Amsterdam. They even won the World cup in 1930 and 1950. Among the semifinalist teams only Brazil has ever won a Confederation Cup but that may not be the ruling factor this time. More and more Brazilians protesting against this match and violent riots at Rio DI Geniro may or may not affect the psychology of the Brazilian team.

Absence of previous Confederation Cup winners like France, Argentina, Denmark and Mexico has obviously lessened the spirit of this cup but the football fans all over the world are discussing about the matches, forecasting and waiting impatiently for the finals on 30 June 2013 at Estádio do Maracanã , Rio DI Geniro

The Top 10 Safest Banks in the World

The financial safety of the banks is highly scrutinized these days as the concern over the finance and related issues increases day by day. The Global Finance released a report on the safest banks in the world. The report has 50 banks which are rated as highly stable and considered as the best.

KfW  the German, government owned bank topped the list for being the safest bank in the world. Formed in 1948 and based in Frankfurt, 80% of the bank is owned by the Federal Republic of Germany and 20% of ownership vests with States of Germany. Bank Nederlandse Gemmeenten is the second best bank in this list. This is the 4 th bank in the Netherlands on the base of assets. BNG lends finance only to semi-public organizations.

Third best bank is a Swiss bank Zurcher Kantonalbank with total asset of CHF 110 billion. Landwirtschaftliche Rentenbank is the 4^th bank in this list which is headquartered in Frankfurt. This bank focuses on lending in agriculture and food industry. L-Bank which is also a German bank holds the 5^th position is a parent company for three commercial banks and was formed in January 1999 functions under public law.

Nederlandse Waterschapsbank ie, the Netherland Waterboard Bank provides funds for the water board is in the 6^th position functioning under the trade name NWB. It is a private financial institution. At number 7 is the French Bank Caisse des Dépôts et Consignations which was founded in 1816. German bank NRW.Bank comes at 8th position in this list.

The bank Banque et caisse d'épargne de l'État based in Luxembourg founded in 1856  holds the 9^th position. The 10^th place is for Rabo Bank which is in Netherlands and headquartered in Utrecht. They provide finance for the agribusiness and food is the core industry they finance.

The top 10 safest banks are located in the European  countries which these top 10 banks are located are not seriously affected by the economic crisis.KfW, Landwirtschaftliche Rentenbank, L-Bank, NRWBank are the 4 banks from Germany which is in the top 10 bank’s list. Germany is considered as the strongest economy among the EU union and recently the German Chancellor came up with the statement that Germany will not take the burden of uplifting EU crisis.

There are 8 Asian banks in this top 50 list where 3 of them are from Singapore and 2 from China and 1 from Taiwan and 2 from South Korea and 4 banks from the middle east ie, 1 from Abudabi, 1 from Qatar and 2 from Saudi Arabia. 5 US banks are also in the list but the absence of them from the top 10 list is noticeable.  

A Short Note on Global Risk Report 2013 by World Economic Forum

The Global Risk Report 2013, released by the World Economic Forum is a detailed study on the risk which will affect the world in the near future. This Blog keeps the vision to promote awareness about that crucial report. In the introduction Mr Klaus Schwab Founder and Executive Chairman of World Economic Forum has invited our attention towards these risks and requested to debate on these threats

This year’s meeting of the World Economic Forum was held at Davos, Switzerland on the theme Resilient Dynamism. This particular theme was raised to bring and spread awareness about the risks which will affect the whole world without the country barrier. These risks are divided into three categories such as 1) preventable risks 2) strategic risks 3) external risks or global risks. This report is based on this years’ Global Risk Perception Survey performed by more than 1000 experts from various sectors including industry, government, academics and civilians.

Economic Risks

Finance is very complex and economic risks will be higher in the future. The major economic risk will be Severe Income Disparity and the financial system failure arising  from that. Throughout the centuries the rich-poor indifference was the root cause of all rebellion.

Many philosophers envisaged the importance of equality and socialism but these ideologies never culminated as a permanent solution. The future will witness an increase in the financial gap between rich and further consequences.

Chronic Fiscal Imbalances will make the government  a failure in redressing the huge amount of debt. The government’s future development plans and related borrowing may not go hand in hand with the income generated in the respective countries. This report throws light on the volatility in energy and agricultural prices as another risk which is likely to happen. Hard Landing of an emerging economy has also been predicted. This happens due to the tightening of the monetary policy the central governments of those respective countries as happened in the US. Chronic labor market imbalances may be the other general risk comes in this category.

Environmental Risks

The second category of major risk is related to the environment. Increased Green House Gas Emissions. will be the major threat. The governments and industries will focus on to the expansion of carbon sinks to fight these greenhouse gases. All over the world climate is changing rapidly and this will be another risk and adapting to the changes will not be an easy task that may even fail. The Failure in Climate Change adaptation will be a great risk. Mismanaged Urbanization also comes as one of the environmental issues. The number of urban population in search of a better asylum is exceeding than rural due to the rural exodus  less people are remaining to work in the agriculture  segment which should be the base industry of any economy!

A collapse in the ecosystem is well predicted due to the Over Exploitation of the Species

This species overexploitation will lead to the destruction of the biodiversity. Another risk forecasted is the Persistent Extreme Weather. Land and Waterway use Mismanagement is another risk in the environment category, Misuse of the waterway and land will have severe consequences which will adversely affect the ecosystem leading to a collapse.

Geopolitical Risks

The report calls it Pervasive Entrenched Corruption; the major threat among the geopolitical risks. Corruption, which is a worldwide phenomenon, will increase day by day, the abuse of power will be extended for the personal gain and the rulers will be biased for the lobbies. Global Governance Failure which will be the result of the weak governing institutions, the treaties will fail to get accomplished; world governance together will fail to address the global issues or risks and the governments will hesitate to collaborate. Third risk will be Terrorism which is already deep-rooted in many countries will cause severe human and material damage and in the coming days society will be more capitulated towards terrorism. The number of international conflicts will increase due to the Failure in the Diplomatic Conflict Resolution. This risk will lead the world to be a battlefront and a difficult place to live. Entrenched Organized Crime will be a great risk and this will be organized by agile global networks. Illicit Trade is another risk this will include people as well as goods.

Societal Risks

There are 4 major risks which are likely to happen in the next ten years. Water Supply Crises will lead to the shortage of fresh water. Population ageing due to the rising life expectancy or declining birth rates and its Population Ageing Mismanagement will be the

other risk in societal category. The next risk is Rising Religious fanaticism which will divide the society to different poles causing tensions. The Food Shortage Crisis will be another major risk.

Technological Risks

As China is known for its Cyber Attacks, the state owned organized Cyber attacks will be the greatest risk which is likely to take place in the next ten years. These attacks will be with terrorist or criminal backing. Private lives are under scrutiny and the Massive Data Theft will be another major risk.. This data extraction will deleterious for the personal and official security of the people as well as nations.

The Global Risk Report 2013 is a result of detail study and it clearly indicates us  to abate the risk even though it is not a clairvoyant report. This blog is based on the risks which are more likely to happen. It teaches us how important is for us to abstain from hurting the world we live.