View from McLeod Road: Why the Sino-Pak alliance is economically worthless

In the 12-year period between July 2000 and June 2012, net foreign investment in Pakistan amounted to about $29 billion, of that, just $0.8 billion came from China

By Farooq Tirmizi

KARACHI: Pakistan’s leaders love using laughably outrageous metaphors in describing the country’s relationship with China, yet the truth is that this so-called alliance means almost nothing positive for the Pakistani economy.

All of Islamabad – indeed all of Pakistan – appears to be bending over backwards in laying out the red carpet to welcome Chinese Premier Li Keqiang. But the fact of the matter is that China will give Pakistan almost nothing, and this two-day trip is really only being made by the Chinese premier to avoid slapping Islamabad in the face completely, after having made his first trip abroad a three-day visit to India, in a key signal about the real shifts in Chinese foreign policy.

Pakistanis love to proclaim China as our “all-weather friend. In his last visit to China, former Prime Minister Yusuf Raza Gilani described the relationship as “higher than mountains, deeper than oceans, stronger than steel and sweeter than honey.”

On this trip, Premier Li described the relationship as “a tree, now exuberant with abundant fruits”.

This was not him being poetic. It was delivering a message that nobody in Pakistan seems to have gotten: that China’s ties with Pakistan are not some eternal alliance of friends, but a strictly utilitarian relationship in which Beijing uses Islamabad occasionally to scare the living daylights out of the United States and India to get what it wants in its negotiations with Washington and New Delhi, and then abandons Pakistan once that transaction is completed.

A look at the numbers suggests that the Islamabad-Beijing relationship has had very little benefit for Pakistan as whole.

In the 12-year period between July 2000 and June 2012, net foreign investment in Pakistan amounted to about $29 billion, according to the State Bank of Pakistan. Of that, just $0.8 billion came from China, and nearly all of that was China Mobile’s investment in Zong.

China’s investment in Pakistan is less than that of tiny Netherlands, which invested $1.4 billion during that time. The supposed “Great Satan” – the United States – invested the most in Pakistan: $7.7 billion, or more than a quarter of all foreign investment in the country. There is only one major Chinese company with actual investments in Pakistan: China Mobile. The number of major US companies investing in Pakistan? More than 30.

PAKISTAN – $15 billion Saudi bailout likely

ISLAMABAD, May 22: With an ‘amiable’ government in place, Saudi Arabia is expected to extend a bailout package of about $15 billion to Pakistan’s highly indebted energy sector by supplying crude and furnace oil on deferred payment to enable it to resolve the chronic circular debt issue.

A senior government official said the Saudis had been taking reasonable interest in helping out the incoming PML-N government led by Nawaz Sharif.

They had extended a similar special package to Pakistan soon after it went nuclear in 1998 and faced international economic sanctions.

Between 1998 and 2002, Pakistan received $3.5 billion (Rs190 billion at the exchange rate at that time) worth of oil from Saudi Arabia on deferred payment, a major part of which was converted into grant.

According to the official, as soon as the PML-N emerged as the majority party after the May 11 elections, the Saudi ambassador in Islamabad sought a briefing on the country’s oil requirements from the foreign ministry before calling on prime minister-designate Nawaz Sharif in Raiwind, Lahore.

He was immediately provided a position paper, the official said.

Pakistan expects about 100,000 barrels of crude oil and about 15,000 tons of furnace oil per day from Saudi Arabia on deferred payment for three years. The amount involved works out at about $12-15bn.

The facility can be utilised to reduce loadshedding in the short term and provide an opportunity in the medium term to restructure the power sector by minimising subsidies, eliminating circular debt, ensuring recovery from the public sector and reducing system losses to bring it to a self-sustainable level.

“During the package period, the PML-N government can resolve the electricity crisis and develop hydropower projects through a combination of public and private investments and bagasse-based power production by the sugar industry,” he said.

Read more » DAWN
http://beta.dawn.com/news/1013070/15-billion-saudi-bailout-likely/

U.S. Bonds Cheapest Since 1990

U.S. Bonds Cheapest Since ’90 Versus Bunds Counter Buffett

By Cordell Eddings

The longest decline in Treasuries this year has left U.S. government debt the cheapest since March 2011 when measured by real yields and the best relative value compared with German bunds in more than two decades.

After inflation, 10-year U.S. notes yielded 0.91 percent last week, or 1.77 percentage points more than real yields on U.K. gilts, the widest spread in 25 months. Versus Germany, the securities are the least costly in 23 years when adjusted for the recent record-low interest rates around the world that distorted the normal relationship, according to FTN Financial.

Federal Reserve Chairman Ben S. Bernanke is counting on Treasuries to contain borrowing costs as the central bank buys $85 billion a month in securities to sustain the economic recovery that lifted U.S. consumer confidence to the highest in almost six years. The better relative yield for U.S. bonds may help bolster demand even as Warren Buffett said this month that he pitied fixed-income investors because of about record-low interest rates.

Read more » Bloomberg
http://www.bloomberg.com/news/2013-05-19/u-s-bonds-cheapest-since-90-versus-bunds-counter-buffett-pity.html

Europe’s Tax on Financial Trades Is a Risky Bet

By Mark Buchanan

Millions of Europeans are about to become the subjects of a vast social experiment. What’s troubling is how little anyone understands about where it might lead.

A total of 11 European Union member states — including France, Germany, Italy and Spain, but not the U.K. — plan to introduce a small tax on financial transactions by the beginning of 2014. Financial institutions will pay 0.1 percent on all stock and bond trades, and 0.01 percent on derivatives. Although taxes that are at least crudely similar exist in about 40 nations around the world, the European measure will be the first introduced on such a large scale.

The idea of a financial transactions tax goes back to the economist John Maynard Keynes. In the 1930s, he argued that speculation on assets drives market instability and suggested that an appropriate levy could deter it. If small enough, the tax would have a negligible effect on long-term stock investors, who trade infrequently and focus on real economic factors in making their decisions. It would primarily deter short-term speculators who buy and sell frequently in response to temporary market movements.

The idea makes intuitive sense and could, in principle, help channel investment to productive economic activity. There’s much debate, though, over whether it can work in reality. Well- known economists such as Joseph Stiglitz and Larry Summers have supported a transactions tax. Others of equal prominence have countered that it would be likely to lower equity prices, drive trading across borders and possibly increase market volatility.

Canada can’t account for $3.1B in anti-terror funding, AG finds

Lack of information on program spending a theme of auditor general’s spring report

By Meagan Fitzpatrick,  CBC News

The federal government needs to do better at tracking and evaluating some of its program spending to ensure taxpayer dollars are being well-spent, Auditor General Michael Ferguson found in his spring report released today, and one of the most striking examples is that it can’t account for $3.1 billion in anti-terrorism funding.

The lack of information on spending and on results achieved for money spent is a common theme throughout Ferguson’s report, which includes 11 chapters in total.

In his audit of the Public Security and Anti-Terrorism (PSAT) Initiative, Ferguson suggested there should have been a government-wide review of spending by 35 departments and of the results for the program that was funded between 2001 and 2009.

He found that departments reported spending $9.8 billion of the $12.9 billion allocated for security and anti-terrorism measures under the program but he couldn’t determine where the other $3.1 billion went. The Treasury Board had no clear answers for him.

The Rise of China’s Reformers?

Change You Can Believe In

By Evan A. Feigenbaum and Damien Ma

Most observers are gloomy about the prospects for serious economic reform in China. But they ignore a central lesson of recent Chinese history: reform is possible when the right mix of conditions comes together at the right time. And the very circumstances that facilitated the last major burst of economic reform in the 1990s are largely present today.

Read more » Foreign Affairs
http://www.foreignaffairs.com/articles/139295/evan-a-feigenbaum-and-damien-ma/the-rise-of-chinas-reformers?cid=soc-twitter-in-snapshots-the_rise_of_chinas_reformers-041813

Via – Twitter

IMF downgrades global growth forecast again

Conditions have worsened in past 3 months, demanding more ‘aggressive’ action

By CBC News

The International Monetary Fund delivered a pessimistic update to its forecast for the world’s economy on Tuesday.

In January — the last time it gave an update — the group expected the world’s economy to grow at a reasonable pace, slightly ahead of 2012′s pace.

Conditions have worsened further in the past three months, however, and the situation in Europe demands more “aggressive” action from policymakers, the IMF said.

“Europe should do everything it can to strengthen private demand,” IMF’s chief economist Olivier Blanchard said.

“What this means is aggressive monetary policy, and what this means is getting the financial system to be stronger — it’s still not in great shape.”

Canada, U.S. forecasts

The IMF says the world’s economy will expand by 3.3 per cent this year. That’s less than the 3.5 per cent pace of growth that the IMF expected previously, but a bit higher than the 3.2 per cent growth seen in 2012.

The IMF expects the U.S. economy to expand 1.9 per cent this year. That’s below its January estimate of 2.1 per cent and last year’s U.S. growth of 2.2 per cent. Still, the IMF says the U.S. economy should expand 3 per cent in 2014.

As for Canada’s economy, the IMF expects it will likely slow to about 1.5 per cent this year from 1.8 last year, before picking up to 2.4 per cent in 2014.

“The main challenge for Canada’s policy-makers is to support growth in the short term while reducing the vulnerabilities that may arise from external shocks and domestic imbalances,” the body advises.

“Although fiscal consolidation is needed to rebuild fiscal space against future shocks, there is room to allow automatic stabilizers to operate fully if growth were to weaken further.”

Courtesy: CBC
http://www.cbc.ca/news/business/story/2013/04/16/business-imf-forecast.html

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More details » http://www.cbc.ca/player/News/Business/ID/2379822011/

Will the Japan trade deal revive globalization?

Japan Trade Deal May Revive Globalization

By the Editors

The U.S. and Japan agreed to terms last week allowing Japan to join talks on the Trans-Pacific Partnership, another step toward creating the world’s most important free-trade initiative. The emerging pact has far- reaching implications for domestic policy in Japan and elsewhere, and could offer a new approach to global as well as regional trade liberalization.

Japan’s participation would widen the TPP to 12 members, accounting for 40 percent of global gross domestic product. The Japanese economy is bigger than all the other non-U.S. members combined. By taking part, Japan is making a commitment to long- overdue domestic economic change. Supply-side reform is one of the “three arrows” Prime Minister Shinzo Abe has promised will revive Japan’s stagnant economy (the others are monetary stimulus and fiscal expansion). In the long term, it’s the one that matters most — and it’s the one that the TPP can provide.

Abe deserves much credit for pressing this part of his program so determinedly. Special interests, especially farming, have supported protectionism in Japan for years. (Rice farmers are shielded by tariffs approaching 800 percent.) The TPP will mobilize Japan’s manufacturing exporters, which will gain directly from the deal, as a countervailing political force.

Farmer Resistance

According to the government’s estimate, annual farm and marine production might decline by 3 trillion yen ($30.3 billion) under the TPP, though other sectors would expand more than twice as much, raising aggregate GDP by 3.2 trillion yen. That’s probably an underestimate, because the benefits would build over time. One independent study puts Japan’s potential gain at more than $100 billion a year (2 percent of GDP) by 2025. ….

Read more » Bloomberg
http://www.bloomberg.com/news/2013-04-14/japan-trade-deal-may-revive-globalization.html?alcmpid=view

Canadian dollar falls after highest job losses since recession 4 years ago

Canadian Dollar Tumbles After Unexpected March Employment Loss

By Ari Altstedter

The Canadian dollar fell in its biggest decline in nine months against its U.S. peer after the nation unexpectedly lost jobs last month by the most since the last recession four years ago.

The currency declined against 13 of its 16 major peers as Canada had 54,500 fewer jobs in March, compared with the 6,500 gain predicted in the median estimate of a Bloomberg survey of 24 economists. The nation’s jobless rate increased to 7.2 percent from 7 percent. The U.S. added 88,000 jobs in March, versus estimates of a 190,000 gain. The Bank of Canada’s March 6 policy statement called for the economy to “pick up through 2013” on its way to 2 percent annual growth.

“Huge miss on both numbers, but particularly the Canadian number after many months of surprisingly strong employment data, we’ve finally seen some give back, so pretty swift reaction for the Canadian dollar,” said Blake Jespersen, managing director of foreign exchange at Bank of Montreal, by phone from Toronto. “There’s a lot more room for this to run, I think this is just the beginning of what could be a series of weaker employment numbers in Canada.”

The loonie, as the Canadian dollar is known for the image of the C$1 coin, fell 0.5 percent to C$1.0176 at 5 p.m. in Toronto. Earlier, it fell 1.1 percent to C$1.0236 per U.S. dollar, the largest drop since June 28. One loonie buys 98.27 U.S. cents.

Bonds Gain

Canada’s benchmark 10-year government bonds rose, with yields falling four basis points or 0.04 percentage point to 1.75 percent, touching the lowest level since Dec. 11. The 1.5 percent security maturing in June 2023 rose 36 cents to C$97.68.

Crude oil, the country’s biggest export, fell 0.3 percent to $93.02 per barrel in New York, after touching its lowest point since March 7. The Standard & Poor’s 500 Index of U.S. stocks fell 0.4 percent.

Canada’s jobs figures brings the labor market more in line with other parts of the economy, where output growth slowed to a 0.6 percent annualized pace in the fourth quarter and inflation has lagged the central bank’s 2 percent target since May. Last month’s figures mean Canada posted a net loss of 25,700 jobs in the first three months of the year.

’Ugly Across’

“It was ugly across the board, there wasn’t one redeeming feature for the Canadian employment report,” said Mark Frey, chief market strategist at Cambridge Mercantile Group, a corporate currency broker, by phone from Victoria British Columbia. “When you look at the overall employment figures for Q1 in Canada, you’re seeing a pretty bleak outlook that has turned almost on a dime from the last five months of 2012.”

A separate report showed Canada recorded its 11th straight merchandise trade deficit in February, the longest streak in at least 25 years, with the shortfall unexpectedly widening as exports of metals declined.

The deficit of C$1.02 billion ($1 billion) followed a January figure that was revised to C$746 million from C$237 million, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg forecast the string would end with a C$100 million surplus, based on the median of 21 forecasts.

“Obviously disappointment on both sides of the border,” said David Tulk, chief macro strategist at Toronto-Dominion Bank (TD)’s TD Securities unit by phone from Toronto. “The labor market is sort of catching up to the wider economic backdrop that we’ve always argued is still quite subdued, so this helps a little bit.” ….

Read more » Bloomberg
http://www.bloomberg.com/news/2013-04-05/canadian-dollar-extends-loss-after-unexpected-march-jobs-decline.html

CBC News – Canada loses 54,500 jobs in March

Jobless rate ticks higher to 7.2% as private-sector hiring slumps

By CBC News

Canada’s economy lost 54,500 jobs in March, bleak new data from Statistics Canada showed Friday.

That’s the worst month for Canadian employment since the recession of 2009. When added to the numbers for January and February, they show that Canada’s economy has lost 26,000 jobs so far in 2013 as a whole

The job losses pushed Canada’s jobless rate higher to 7.2 per cent.

“Official unemployment would have increased even more but for 12,300 Canadians dropping out of the labour force altogether and consequently not being counted as unemployed,” United Steelworkers economist Erin Weir said of the data.

Provincially, Quebec, British Columbia and Alberta lost jobs, and employment edged down in Ontario. The only province with an increase was Nova Scotia.

Loonie sinks on news

Private sector hiring, the engine of growth that policymakers keep a close eye on, actually fared even worse. There were 85,000 fewer private sector workers in March, while the public sector was largely unchanged,

There was an increase of 39,000 among self-employed people that counteracted the decline.

Overall, economists had been expecting about 6,500 new jobs, so a loss of 54,500 represents a considerable miss.

Much of the losses came among those in the core working-age group of those between 25 and 54. Among those younger than 25 and older than 54, the job numbers were pretty steady.

The Canadian dollar lost half a cent to trade below 98 cents US in reaction to the news.

Courtesy: CBC News
http://www.cbc.ca/news/canada/story/2013/04/05/business-jobs-canada.html

Marx’s Revenge: How Class Struggle Is Shaping the World

Even business journals are recognizing it. Since this piece originates with a business publication, you will obviously find some things that may startle you. If so, disregard..or better, explore and see what the other side thinks. —Eds.

By Michael Schuman, Business Time

Karl Marx was supposed to be dead and buried. With the collapse of the Soviet Union and China’s Great Leap Forward into capitalism, communism faded into the quaint backdrop of James Bond movies or the deviant mantra of Kim Jong Un. The class conflict that Marx believed determined the course of history seemed to melt away in a prosperous era of free trade and free enterprise. The far-reaching power of globalization, linking the most remote corners of the planet in lucrative bonds of finance, outsourcing and “borderless” manufacturing, offered everybody from Silicon Valley tech gurus to Chinese farm girls ample opportunities to get rich. Asia in the latter decades of the 20th century witnessed perhaps the most remarkable record of poverty alleviation in human history — all thanks to the very capitalist tools of trade, entrepreneurship and foreign investment. Capitalism appeared to be fulfilling its promise — to uplift everyone to new heights of wealth and welfare.

Or so we thought. With the global economy in a protracted crisis, and workers around the world burdened by joblessness, debt and stagnant incomes, Marx’s biting critique of capitalism — that the system is inherently unjust and self-destructive — cannot be so easily dismissed. Marx theorized that the capitalist system would inevitably impoverish the masses as the world’s wealth became concentrated in the hands of a greedy few, causing economic crises and heightened conflict between the rich and working classes. “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole,” Marx wrote.

A growing dossier of evidence suggests that he may have been right. It is sadly all too easy to find statistics that show the rich are getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the median annual earnings of a full-time, male worker in the U.S. in 2011, at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom 60% suffered a decline, the EPI calculated. No wonder some have given the 19th century German philosopher a second look. In China, the Marxist country that turned its back on Marx, Yu Rongjun was inspired by world events to pen a musical based on Marx’s classic Das Kapital. “You can find reality matches what is described in the book,” says the playwright.

What we can learn from Turkey

Smokers’ Corner: Cold Turkey

By Nadeem F. Paracha

I’ve twice been to Turkey in the last three years. My second trip there coincided with the 2011 election. Recently I have come across various conservative and pro-establishment personalities, politicians and media men in Pakistan praising the Turkish model of democracy and economics.

For example, Imran Khan just returned from Turkey and sounded extremely impressed by that country’s people and politics.

The reason why you might now be hearing more and more Pakistanis singing praises of Turkey is due to the fact that a determined political party with an Islamist background has been winning elections and forming governments there ever since 2001.

It is a good sign that to some of our conservatives the Turkish social and political model now seems more charming to emulate than the puritanical authoritarianism of certain oil-rich Arab states. However, the fact is they may really be over-romanticising their Turkish experience. Either they haven’t understood the dynamics of Turkey’s political and social milieus, or they are only seeing what they want to see: i.e. a conservative Islamist party at the helm in what was supposed to be a secular country.

Only recently I heard a TV commentator suggest that Turkish prime minister, Recep Erdogan’s AK Party, has been winning elections due to its popularity among the rural and semi-rural Turks. This is a rather simplistic understanding of what is actually a complex consensus that the AK Party has struck with almost all sections of Turkish society.

Erdogan’s multiple electoral successes have more to do with his emphasis on economic growth, reform and his all-out efforts to help Turkey become part of the European Union (EU) than on the usual stern moralistic and anti-West stances that most Islamist parties are stuck with in most Muslim countries. During my trip to Istanbul when the campaigning for the 2011 elections was in full swing, not even once did I hear Erdogan (whose wife adorns a hijab) mention the word Islam.

Afghan Tax – GDP Ratio 11%, Pakistan 9%

Afghans warned: the taxman is coming after you

By Katharine Houreld

KABUL (Reuters) – One of Afghanistan’s most surprising success stories lies tucked away on a potholed street notorious for suicide bombings and lined with rusting construction equipment.

The work of the country’s top tax collector is more inspiring than the view from his office in Kabul. Taxes and customs raised $1.64 billion last financial year, a 14-fold increase on 10 years ago. That means, now, the government can pay just over half of its recurrent costs such as salaries.

Thanks to tougher enforcement procedures, Afghanistan’s tax to GDP ratio today stands above 11 percent – ahead of neighboring Pakistan’s dismal 9 percent.

U.S. Economic Inequality Is Permanent, Study Finds

Bye, Bye American Dream! U.S. Economic Inequality Is Permanent, Study Finds

Analysis of two decades of income tax trends also find the rich consume more.

By Steven Rosenfeld

A new study by a team of economists in academia and the government has concluded that economic inequality is a permanent—not temporary—feature in the United States, based on an analysis of 350,000 federal income tax returns between 1987 and 2009.

“For household income, both before and after taxes, the increase in inequality over this period was predominantly, although not entirely, permanent,” the highly technical report concluded. “We also find evidence that the U.S. federal tax system helped reduce the increase in household income inequality; but this attenuating effect was insufficient to significantly alter the broad trend toward rising inequality.”

Budget paper: Extra billions given to Pak army acknowledged

By Shahbaz Rana

ISLAMABAD: After years of keeping it under wraps, the outgoing government has finally admitted to releasing an annual grant of around Rs200 billion to the armed forces, the burden of which is likely to be passed on to taxpayers from next year.

In its budget strategy paper – a document encompassing this year’s revised budget estimates and projection for the next three years – the Pakistan Peoples Party-led coalition government conceded that it was paying the annual grant in security-relating spending, which was earlier largely financed out of the Coalition Support Fund (CSF).

The government had never accepted releasing the amount in the past despite repeated reports in the media.

The documents further stated that from 2009 to the current fiscal year, a whopping sum of Rs687 billion was given to the armed forces under the head of security-related spending. The highest payment was made in fiscal year 2009-10 with Rs215 billion given to the forces.

Much of the additional grant was paid out of the Coalition Support Fund (CSF) reimbursements by the US. During the current fiscal year, the US has reimbursed $1.9 billion.

For the next fiscal year 2013-14, commencing from July this year, and till 2016, authorities have estimated Rs190 billion in annual security-related expenses. However, Planning Commission Deputy Chairman Dr Nadeemul Haque suggested adding the grant in the regular defence budget once the CSF facility exhausts.

In his comments on the three-year strategy paper, Dr Haque wrote that “security-related spending is stagnant at around Rs190 billion whereas it has gone up from Rs122 billion in fiscal year 2012 to Rs185 billion and then remained stagnant at Rs190 billion for the next three years”.

He said the amount was consistent with reimbursements under the CSF which is going to exhaust in fiscal year 2014.

However, it is yet to be seen whether the finance ministry adds the spending in the regular defence budget or keep financing it as a separate item.

The strategy paper also increased this year’s defence budget to Rs570 billion – an addition of Rs25 billion over the budget approved by parliament in June last year.

By only adding the security-related spending and the supplementary budget, the stated defence budget has peaked to Rs755 billion.

Furthermore, the services fees from the United Nations on account of military personnel involved in peacekeeping missions, which is estimated at Rs30 billion for this year and over Rs100 billion for military pensions, the accumulative defence spending crosses Rs880 billion.

Making energy from waste : 25 MW Rachna Power Plant on the cards

LAHORE: National Industrial Parks (NIP) Development and Management Company has decided to establish a 25 megawatt (MW) power generation plant based on municipal and agro waste besides local coal or combination of these fuels for the electricity requirement of the industries at the Rachna Industrial Park on the main Lahore-Sheikhupura Road.

The Rachna Power Plant will be the first-ever power unit to be developed on the basis of waste as a source of energy. The plant’s primary fuel will be Refused Derive Fuel (RDF) prepared from a mixture of municipal solid wastes and agro wastes, while the coal would be used as a backup fuel.

The technology of an integrated recovery of recyclable materials and production of the refused derive fuel will be adopted for this power plant.

The concept of the modern waste to energy plant has been proposed for the Rachna Power Plant, which is very different from the old incinerators due to the technological progress of the last decade.

Chief Executive Officer Mohsin Syed at NIP meeting in which investors of the Rechna Industrial Park were also present said the municipal solid waste of Lahore and surrounding area and the agro wastes, which including rice husk, corn and wood waste of the adjoining areas would be collected and transported to recycle it into a real fuel that could be easily stored, transported and efficiently burned at the plant site within the premises of the Rachna Industrial Park.

He said the power generation complex was proposed to consist of one unit of 6 MW and two units of 11 MW each with total gross capacity of the 28 MW and the net capacity at site would be 25.5 MW to provide operational flexibility and reliability in case of shut down of one or more units.

The power generation facility would be located within the premises of the Rachna Industrial Park located at 7.5 kilometers (km) Lahore-Sheikhupura Road on the Upper Chenab Canal. The site is at the distance of 18 km from the

Lahore-Shekhupura Motorway Interchange, 24 km from the Lahore city centre and 40 km from the Allama Iqbal International Airport Lahore and an area of 10 acres has already been earmarked for the power generation complex at the Rachna Industrial Park, the NIP chief explained.

Canada drops out of top 10 most developed countries list

The United Nations human development index now ranks Canada as 11th

By the Canadian Press

Canada has slipped out of the top 10 countries listed in the annual United Nation’s human development index — a far cry from the 1990s when it held the first place for most of the decade.

The 2013 report, which reviews a country’s performance in health, education and income, places Canada in 11th place versus 10th last year.

Noam Chomsky: Can Civilization Survive Capitalism?

Capitalism as it exists today is radically incompatible with democracy.

There is “capitalism” and then there is “really existing capitalism.”

The term “capitalism” is commonly used to refer to the U.S. economic system, with substantial state intervention ranging from subsidies for creative innovation to the “too-big-to-fail” government insurance policy for banks.

The system is highly monopolized, further limiting reliance on the market, and increasingly so: In the past 20 years the share of profits of the 200 largest enterprises has risen sharply, reports scholar Robert W. McChesney in his new book “Digital Disconnect.”

Fallout from ‘Untouchables’ Documentary: Another Wall Street Whistleblower Gets Reamed

By: Michael Winston

A great many people around the county were rightfully shocked and horrified by the recent excellent and hard-hitting PBS documentary, The Untouchables, which looked at the problem of high-ranking Wall Street crooks going unpunished in the wake of the financial crisis. The PBS piece certainly rattled some cages, particularly in Washington, in a way that few media efforts succeed in doing. (Scroll to the end of this post to watch the full documentary.)

Now, two very interesting and upsetting footnotes to that groundbreaking documentary have emerged in the last weeks.

The first involves one of the people interviewed for the story, a former high-ranking executive from Countrywide financial who turned whistleblower named Michael Winston. You can see Michael’s segment of The Untouchables at around the 4:20 mark of the piece. The story Winston told during the documentary is essentially an eyewitness account of the beginning of the financial crisis.

Capitalism Becomes Questionable – by Richard D. Wolff

The depth and length of the global crisis are now clear to millions. In the sixth year since it started in late 2007, no end is in sight. Unemployment rates are now less than halfway back from their recession peak to where they were in 2007. Over 20 million are without work, millions more limited to part-time work, millions have been foreclosed out of their homes. Those who retain jobs suffer declining real wages, fewer benefits, reduced job security, and more work. This year of “austerity” began with an increase in the payroll tax rate for over 150 million wage-and-salary earners from 4.2 to 6.2 per cent (a 48% increase from 2012) — a far more significant tax event than the trivial — but wildly hyped — increase of taxes on those earning over $450,000 annually from 35 to 39.6 per cent (a 13% increase from 2012). Austerity deepens as Republicans and Democrats negotiate merely details of their agreements to cut government spending on social programs helping working people.

Between the crisis and today’s austerity policies lie the bailouts — a bought government’s program to aid mega-finance and other large corporations with unlimited funds unmatched by anything comparable for the mass of working people and smaller businesses. The bailouts worked for them, for the large corporations who secured them for themselves. For that reason, “recovery” blessed them while it bypassed everyone else. Now austerity policies shift onto the general population major portions of the costs of the crisis and the bailouts. The situation is so bad and US government complicity with capitalists at the people’s expense so exposed that the capitalist system is becoming questionable. Criticism challenges the last half-century’s treatment of capitalism as the absolutely best possible economic system, beyond any need for discussion or debate, justifiably implanted around the world by military force, etc.

First of all, this deep and long crisis undermines decades of confident assurances and predictions that another deep capitalist depression was no longer likely or even possible. Capitalism’s inherent instability overwhelmed and thus proved the futility of efforts to prevent its crises. Moreover, both conventional and extraordinary monetary and fiscal policies failed repeatedly to bring Europe, Japan, and the US out of the crisis. Central banks, international agencies, and national executives charged with economic responsibilities have, since 2007, spoken with assurance and met often, posed for media photos, puffed and threatened, made a few last-minute, stop-gap agreements, resolved to meet again and do more at the next meeting. However, the crisis continued for most people. In many places it has gotten much worse. All this challenges glib notions that capitalism’s highest authorities have the system “under control.”

Implicitly, at first, millions of people began to question whether capitalism does still “deliver the goods” as its defenders so long insisted. In the US, declining economic conditions for parents coupled with rising school debts and declining job prospects for their children suggest rather that capitalism “delivers the bads.” The widening inequalities of wealth and income that contributed to the crisis have in turn been further aggravated by it.

Pakistan to do what it deems fit, says Khar

By Mariana Baabar

ISLAMABAD: As Islamabad and Tehran set up a joint contracting company to complete the construction of the $7.5 billion IP gas pipeline project within the next 15 months, Pakistan does not appear apologetic and says that any other government would have done what the PPP-led government did.

“Pakistan continues to suffer from huge energy deficiency and this directly affects our industry and GDP growth. Gas is the cheapest commodity to generate electricity. We need to look at all possible sources of energy including the proposed Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline. The Iran-Pakistan gas pipeline will meet only half the shortfall of energy needs of Pakistan and not our full demand. Pakistan has to do what it deems fit and what is in its national interest. Lack of economic growth has also seen peace stalled in the region,” Foreign Minister Hina Rabbani Khar told ‘The News’.

President Asif Ali Zardari is also credited widely for improving bilateral relations with Iran, investing in the region, and desperately seeking energy from a country facing severe sanctions from the West because of its nuclear policy under the guidelines of the IAEA.

China The New Superpower?

Courtesy: YouTube

Steal bread, go to jail, steal a billion $, get bailed out

Bank of America Bombshell: Whistleblowers Reveal Orchestrated Coverup and Massive Borrower Harm

Obama promised justice to abused American homeowners. Have they gotten it?

By Yves Smith

Editor’s Note:  In his 2012 State of The Union address, President Obama spoke of American homeowners abused by unscrupulous banks and financial institutions. Have they gotten justice? What follows is the first in a new series examining foreclosure settlements and the disturbing patterns of incomptency, malfeasance, and conflicts of interest which have marked their execution. Yves Smith of Naked Capitalism takes a deep dive into the mire of America’s mortage industry and investigates the continued suffering of the public at the hands of greedy predators.

On January 7, 2013, ten servicers entered into an $8.5 billion settlement with the Office of the Comptroller of the Currency and the Federal Reserve, terminating a foreclosure review process which was set forth in consent orders issued in April 2010. Borrowers who had had foreclosures that were pending or had completed foreclosure sales in 2009 and 2010 could request an investigation by independent reviewers, selected and paid for by the servicers but subject to approval by the OCC.

Canada – Manufacturing sales drop sharply

By: The Canadian Press

Statistics Canada says manufacturing sales fell 3.1 per cent in December to $48 billion, the largest decline since May 2009 and worse than expected. ….

Read more » CBC
http://www.cbc.ca/news/business/story/2013/02/15/business-manufacturing-drop.html

Canada is not doing better

Ed Broadbent: Inequality’s a problem for Canada, too

By: ED BROADBENT, The Globe and Mail

I don’t know whether it’s smugness or indifference, but we Canadians can be a self-deluding lot. Growing inequality, portrayed recently in The Economist as a global scourge, when viewed from Canada, seems to be a problem only for others.

After all, it was other countries’ banks that crashed in 2008. It’s in southern Europe that tens of thousands are taking to the streets. And it was in France and the United States that recent elections were fought over the fact that those who created the mess, the top 1 per cent, are still getting big bonuses and low tax rates.

Well, guess what? Canada is not doing better. From 1982 until 2004, almost all growth in family income went to the top 20 per cent, with much of that going to the top 1 per cent, while the bottom 60 per cent saw no growth at all. The increase in inequality in Canada since the mid-1990s has been the fourth highest in the Organization for Economic Co-operation and Development.

But does this matter? Yes, the evidence is in, and the conclusion is clear: Inequality does matter. In terms of social outcomes, more equal societies do better for everyone, not just for the poor, in almost every respect: health outcomes, life expectancy, level of trust in society, equality of opportunity and upward social mobility. A recent study showed that if Americans want to experience the American Dream of upward mobility, they should pack up and move to Sweden. They would have to leave the most unequal democracy and move to the most equal.

CBC – Canadian quality of life hammered by recession

Index shows turnaround in GDP growth no boost to quality of life

Canada’s economy may well be muddling through, but on a more personal level, Canadians generally are not, a new study of well-being suggests.

The Canadian Well-being Index, led by researchers at the University of Waterloo, shows that quality of life in Canada deteriorated by 24 per cent between the onset of recession in 2008 and 2010.

Canada’s main economic indicator, gross domestic product, only declined by about 8.3 per cent over the same period and began to make a turnaround by the end of 2010. ….

Read more » CBC
http://www.cbc.ca/news/canada/story/2012/10/23/well-being-index-canadians.html

Massive Recession in Canada

Canada jobs figure shrinks for first time in 6 months

Canada’s economy shed 22,000 jobs in January, but a corresponding drop in the number of unemployed people looking for work caused the jobless rate to also drop, to seven per cent.

Statistics Canada said the jobless rate ticked 0.1 percentage points lower as 57,500 people stopped looking for jobs — more than enough to offset the decline in the number of jobs.

“It had to be coming,” CIBC economist Avery Shenfeld said in reaction to the news.

In the last five months of 2012, the Canadian economy cranked out an average of 37,000 jobs a month. That was against a backdrop of official GDP data that showed the economy wasn’t expanding much.

With those two data points at odds, something had to eventually give. “The only question was when,” Shenfeld said.

Most of the job losses came from the public sector, where there were 27,000 fewer positions. Self-employment rose slightly, and the private sector was largely unchanged, the data agency said.

Self-employment tends to tick higher following job losses in conventional industries, as people decide to start their own businesses.

Construction boom

The manufacturing sector lost 22,000 jobs, bringing total employment in that key sector down to the same level it was at a year ago. The construction industry was a bright spot, adding 17,000 positions during the month.

“Given the recent slowdown in homebuilding and ongoing public sector restraint, we do not expect the strong hiring gains in the [construction industry] to be sustained,” Scotiabank economist Derek Holt said following the release of the data.

Read more » CBC
http://www.cbc.ca/news/business/story/2013/02/08/business-jobs-canada.html

 

A four-day week for the good of the country?

Should people be off on Fridays?

By Vanessa Barford

The Gambia has shortened the work week, making Friday a day of rest. Is this the perfect pattern for a working week?

In the tiny African nation of The Gambia, public sector workers will now clock in at 8am and clock out at 6pm, Monday to Thursday. They’ll still do a 40-hour week but have the luxury of Friday off.

President Jammeh wants the extra rest day to “allow Gambians to devote more time to prayers, social activities and agriculture”.

In the dark days of the 19th Century, many workers in industrialised nations considered themselves lucky if they got Sunday off. The achievement of a 40-hour week with Saturday and Sunday off for many was a major landmark for the labour movement.

But some have tried to go further. In 2008, about 17,000 government officials in the US state of Utah started working four 10-hour days in a bid to cut costs. ….

Read more » BBC
http://www.bbc.co.uk/news/magazine-21242782

China Industrial Companies’ Profits Climb a Fourth Month

By Bloomberg News

Chinese industrial companies’ profits rose for a fourth month in December, adding to signs the country’s economic rebound is gaining momentum.

Net income increased 17.3 percent from a year earlier to 895 billion yuan ($144 billion), the National Bureau of Statistics said today in Beijing, after a 22.8 percent jump in November. Earnings for the full year gained 5.3 percent.

Industrial profits may rise by an average 30 percent this year as the world’s second-biggest economy recovers from a seven-quarter slowdown, businesses start restocking and export demand improves, Standard Chartered Plc forecasts. Expansion in gross domestic product may accelerate to 8.1 percent this year from 7.8 percent in 2012, according to the median of 44 analyst estimates in a Bloomberg News survey this month. …

Read more » Bloomberg
http://www.bloomberg.com/news/2013-01-27/china-industrial-companies-profits-climb-a-fourth-month.html

Democracies running on Stalinist lines!

The west’s crisis is one of democracy as much as finance

The spirit of dictators like Ceausescu is finding new life in the response of the European elite to pressures in the eurozone

By: Slavoj Žižek

In one of the last interviews before his fall, Nicolae Ceausescu was asked by a western journalist how he justified the fact that Romanian citizens could not travel freely abroad although freedom of movement was guaranteed by the constitution. His answer was in the best tradition of Stalinist sophistry: true, the constitution guarantees freedom of movement, but it also guarantees the right to a safe, prosperous home. So we have here a potential conflict of rights: if Romanian citizens were to be allowed to leave the country, the prosperity of their homeland would be threatened. In this conflict, one has to make a choice, and the right to a prosperous, safe homeland enjoys clear priority …

It seems that this same spirit is alive and well in Slovenia today. Last month the constitutional court found that a referendum on legislation to set up a “bad bank” and a sovereign holding would be unconstitutional – in effect banning a popular vote on the matter. The referendum was proposed by trade unions challenging the government’s neoliberal economic politics, and the proposal got enough signatures to make it obligatory.

Recession and depression in U.S., Canada, Australia and all of Europe

Jewish Mafia tied to death of America

By Mike Stathis

As America’s economic decline was becoming more apparent, the nation’s ruling class convinced Washington officials to introduce a series of levers designed to reduce or even reverse the decline. I have discussed each of these levers in previous articles.

The first lever introduced was the petrodollar in the early 1970s. The next was free trade. This economic pillar of globalization was advocated in the 1980s, but was not pushed through Congress until the early 1990s. Since then, it has spread throughout much of the world.

The final lever was the creation of numerous asset bubbles by the Federal Reserve Bank and Wall Street, both run by the Jewish Mafia. The Fed’s ability to create these bubbles is based largely on the financial attributes of the petrodollar.

Irrespective of these gimmicks, the United States currently finds itself in a depression. This depression is in many ways more severe and will be more difficult to escape than that seen during the 1930s. I have written several articles in support of these claims. ….

Read more » Press Tv
http://www.presstv.ir/detail/2013/01/03/281521/jewish-mafia-tied-to-death-of-america/

Canadians not as confident about Harper in 2013

Heading into 2013, Canadians are confident about the economy, less confident about Harper

By Andy Radia

Despite all the news about the Americans going over the ‘fiscal cliff‘ next week, Canadians are still confident about our economy heading into the new year.

Pakistan’s forex reserves fall

Pakistan’s forex reserves fall to $13.374 billion

By: Reuters

KARACHI: Pakistan’s foreign exchange reserves dropped to $13.374 billion in the week ending Dec 7, from $13.500 billion in the previous week, the central bank said on Thursday. ….

Read more » DAWN