Emerging economies predicted to fare well in 2013

The year 2012 ended with the usual 31st night of gaiety. A New Year always brings new hope though future is always uncertain. But sometimes, to some limited extent, it can be predicted by analysing the past. Already the economists, financial analysts, business leaders and entrepreneurs are trying to predict the year 2013 to set their goals for achieving the better or to be safe from the recession.

Although 2012 was not exposed to the Mayan prophecy, recession in Europe, sluggish growth in the economy of the United States, and a sharp slowdown in China and in most emerging market economies, weak job creation, stagnant incomes, political blunders and persistent downward pressure on financial sectors worldwide and turmoil in the Middle East were marked. These are causing serious economic and geopolitical risks there and elsewhere and a resultant oil price increase hindered global growth. The US, Japan, China, Euro-zone, the UK and emerging economies viz. Brazil, India and Russia dominated the world economy in 2012. The economies are so much vigorously intertwined that a deep recession in any economy has the potentials to make vulnerable the others which affect the world economy highly, let alone the economies of the developing countries. 

But how will the New Year be affected by those factors or what are the optimistic words that will favour 2013 is a point to ponder. There are obviously some gloomy points, which show disappointment. The Federal Reserve of the USA and other central banks are clearly expecting a hardly vigorous recovery by keeping close to zero interest rates. Yet, stock markets do not show very optimistic signs. After the global financial meltdown, high unemployment remains as a significant problem for many Western countries including the US and some Euro-zone countries. In the US, almost five million people are long-term unemployed whereas the situation is worse in Europe. Italy and Portugal are in serious struggle with youth unemployment rates over 30 per cent while Greece and Spain have the rates crossing 50 per cent. The situation compelled many countries to resort to policies of austerity. The recession in Europe and the fiscal cliff of the US have cut off exports of the developing countries. As a result, the countries are facing shortage of foreign remittance, rigidity in capital, increasing risks to cover the fixed cost such as labour wages and salary, godown rent and so forth. The impacts are cyclical and some Third World countries are facing vulnerable situation due to recession in big economies. Except those weak drivers of growth, the weight of debt and the failures of politicians, Japan's snap vote, the reshuffle at the top of China's Communist Party and the US presidential election within a six-week period are significantly responsible for crippling the growth of the world economy as these are three largest economies representing 40 per cent of the world's GDP. 

If one side of the coin holds pessimism, then the other side must have the optimism. At an online debate titled 'Will the world economy be in better shape in 2013 than in 2012?', arranged by The Economist, Anatole Kaletsky, co-chairman and chief economist of GaveKal Dragonomics put forward three broad arguments for optimism about 2013: long-term trends in globalisation and technology, short-term cyclical forces; and expectations among businesses and investors where his opponent speaker Mohamed El-Erian, CEO, PIMCO (a global investment management firm), who was against the motion, also admitted and stated some points focussing stabilisation of the American housing sector, profitability of banks, strength of their balance sheets and robustness of the finances of large corporations. He also acknowledged that Europe has materially reduced the risk of financial implosion, with policymakers evolving from denial to more coherent decision-making while China's new leadership is committed to facilitating a soft landing for the country's economy. It has already showed signs of succeeding. The Economist Intelligence Unit anticipates that global GDP (measured at purchasing-power parity) will grow by 3.4 per cent in 2013, but an improvement on 3.0 per cent achieved in 2012. 

According to the latest GDP forecast estimates of the Economist Intelligence Unit (EIU), Macau will be the fastest growing economy this year and Mongolia will be in the second place Meanwhile, Europe will still be ailing, with Greece leading the decline. After Greece, the shrinking economies will be of Portugal and Spain. 

One of the big four audit firms Price Waterhouse Coopers, LLP (PWC) published its predictions about 2013 world economy in its website. As per their projections of PWC, the advanced economies are projected to be smaller than emerging economies in 2013 for first time since reliable records began. Emerging economies will be in the 'driving seat' of global growth in 2013. Cities of the emerging world will be expanding and these will be a gateway to young and new affluent consumers of the world. The US will be growing by around two percent but Euro-zone will still be flat at best. Commodity price instability will continue.

In 2013, China, India and Brazil will together add around one trillion dollars to the world economy in nominal terms. This is equivalent to the entire annual economic output of Switzerland. China alone will add $788 billion, equivalent to the annual economic output of the Netherlands. In 2013, Australia will overtake Spain to become the 12th largest economy in the world. The US and China will remain first and second while the UK will remain sixth, if PWC's predictions are to be believed. 

Against this backdrop, it could be said that New Year brings new expectations and new expectations mean new hopes. Everyone from a professional to a layman desperately wants 2013 to be better for the global economy than 2012. But there is a popular Bengali maxim: 'The days passed were better, the days coming are worse.' Since future is always uncertain, it is wise to be highly cautious despite favourable analysis. Lastly, to paraphrase Bette Davis in 'All about Eve', "Fasten your seatbelts, 2013 is going to be a bumpy year!" 

Published : The Financial Express, Views & Opinion, Saturday, 16 February 2013

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Passive smoking: Serving jail term for other's crime

Smoking has been the most deadly addiction of man over the centuries. It is a habit in which a substance, most commonly tobacco, is burned for its smoke and is inhaled. The smoke passes into the lungs through the throat. The smoke contains nicotine and is supposed to give a person a feeling of 'mental relief' for a brief period. At the same time, the main substances and other ingredients are of a varied nature and include, mainly, tobacco, and assorted things classified as narcotics, like cannabis and today's heroin, but the use of narcotics is mostly limited as they are commonly unavailable.

The most common forms of smoking today are cigarettes, mostly commercially manufactured and branded. Other smoking tools include pipes, cigars, bidis, hookkahs and vaporisers. The harmful effects of smoking are widely known, and the habit is prevalent worldwide. Side by side, campaigns are being made every day to warn people against smoking and simultaneously to persuade them to abandon the habit that leads to scores of life-threatening diseases --- the most common ones being related to the lungs and the throat. But to the hardened smokers, they bring little results. In contrast, the new generation knows much about the lethal effects of smoking and is keen to keep themselves away from it. However, in what way smoking damages health is not unknown to the thoughtful people in general.

But another matter of great worries is passive smoking, where a person does not inhale tobacco smoke actively but absorbs it from the exhaled fumes of an active smoker. This serious issue is not often highlighted as much as active smoking. Sometimes, we become passive smokers while passing time with friends, at home with relatives, enjoying the company of colleagues, sitting beside co-passengers or strangers. Passive smoking is also called second-hand smoke (SHS) or environmental tobacco smoke (ETS) coming from persons other than the active smokers. The focal point here is not the active smokers, because they merely know about the detrimental outcome of smoking but may not be able to abandon the practice as it is a prolonged habit or simply uncontrolled addiction. But many people are unaware of passive smoking and its harmful effects on human health. So, the active smokers must not enjoy the 'freedom' of affecting others' health. Passive smoking is directly linked to respiratory illness, memory loss, heart disease, malignant throat sore and lung cancer that are particularly dangerous for children, who are exposed to higher risks of sudden infant death syndrome, pneumonia and asthma.

A report in the BBC News health section (24 November, 2011) insists that passive smoking kills 600,000 persons worldwide every year. According to World Health Organization (WHO), one-third of those killed are children, often exposed to smoke at home. Doctors have already confirmed that people who smoke frequently can damage their hearing. A latest study in the journal Tobacco Control, involving more than 3,000 US adults, suggests the same is true of passive smoking. (Source: http://www.bbc.co.uk/ news/health-11758345). Tobacco fumes may disrupt blood flow in the small vessels of the ear which leads to depriving the organ of oxygen and as a result, it accumulates toxic wastes, causing damage.

Collected from a website of BBC News

In this context, many countries around the world have enacted effective laws to curb the evil effects of smoking, and consequentially they are also reaping benefits. Smoking is banned inside all airports, government offices, health clinics and workplaces in Australia. Restaurants and shopping centres in most states and territories are also smoke-free zones. In Canada, smoking levels are some of the lowest in the world, with some 21 per cent of Canadians over the age of 15 reported smoking in 2002, according to government statistics. Public health experts say, the decline has been driven by tough anti-smoking measures adopted in recent years. In May 2008, in the run-up to the Olympic Games, a ban on smoking in most public buildings came into force in the Chinese capital Beijing. In Cuba, smoking was banned on public transports, in shops and other closed spaces from 7 February, 2005. The situation is safer in Europe and the USA. (http://news.bbc.co.uk/2/ hi/in_ depth/3758707.stm).

It is needless to say that these countries are getting benefits because of the effectiveness of the implemented laws. But the situation is worse in our country. Even in Bhutan, the sale of tobacco products has been banned throughout the country. In India, a ban on smoking in public places came into force in October 2008 in an effort to curb high levels of tobacco addiction. Anyone caught breaking the law will be fined 200 rupees. Bangladesh also has introduced several laws on smoking in public places and fixed an amount of fine on defying persons, but implementation of the laws has yet to be effective. Even a section of the law enforcers on duty are also sometimes seen smoking, though clandestinely, in public places, let alone fining somebody. Smoking is very much a conventional habit in our country, and sometimes people do not possess the minimum common sense that they should not smoke in running buses. Even when someone complains about smoking, they do not pay any heed to it, only because of the inoperative laws. The social movements against smoking cannot produce the satisfactory results owing to public apathy.

Eventually, the inoperative laws help people assume that abiding by laws is not something serious. The government should be extremely rigid and strict in implementing the laws to curb smoking, especially passive smoking. Metaphorically, to be harmed by another's smoking means serving jail-term for another's crime. Hence, people should come up with all-out efforts to curb smoking, so that it at least cannot harm other people. The highest number of people exposed to second-hand smoking lives in Asia, if statistics are to be believed. Therefore, to save ourselves from a lethal damage, let us fight our own battle.

Published : Friday, 01 February 2013, The Financial Express, Bangladesh

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Padma Multipurpose Bridge: What is going on?

Padma multipurpose bridge (PMB) project was a much weighted issue in the election manifesto of the incumbent Awami league led government. The 6.15 km long bridge that would connect around 60 million people in the country’s south-east to Dhaka and the rest of the nation is not only the single largest infrastructure project for any Bangladeshi government, but also for the World Bank’s. The project involves construction of about 6.15 km main bridge at Mawa- Janjira Corridor with River Training Works (RTWs) 6 km at Mawa Site and 12 km at Janjira Site. This project was pledged to be completed in the tenure of this government. But the government has only about 12 months to be expired on and yet the drama or suspense is going on and the future of this bridge is still uncertain. At a very earlier stage of this project, the estimated budgeted cost was $1.40 billion and then a revised estimation shows an upward budget of $2.9 billion owing to rising costs of construction materials and other factors. The four major financiers of this project were the World Bank (WB), manila based ADB, Japan based JICA and Jeddah based IDB with respective funding of $1.2 billion, $615 million, $400 million, and $ 140 million. The project was supposed to contain Bridge End Facilities (BEF) at both sides, 5 resettlement sites, railway line with stations and docking facilities, high voltage power and high pressure gas transmission lines, optical fiber cable, and necessary relevant activities. According to a forecast by the Asian Development Bank the much sought Padma Bridge will provide benefit to 30 million people directly and boost Bangladesh’s GDP by 1.2 percent, once completed.

*A Night view of the proposed Padma Bridge.

Subsequently, at a time when WB suspended and later cancelled the funding with a material allegation of corruption and graft, other lenders remained cordial but did not come forward without the participation of WB. But the government insisted their innocence and termed everything as a misunderstanding. The allegation of ministerial corruption and wrong-doing is nothing new for Bangladesh. In this backdrop, a question might arise that if the World Bank evidence is so innocuous, if everyone involved in the project are monk like innocent and WB misunderstands the government then what’s stopping the Bangladesh government from releasing the evidences. Besides that, there remain some questions to be answered and some issues to be cleared.

When WB showed an obvious disregard and put up some conditions for reinstate financing then our prime minister took it as resentment to our sovereignty and pledged to finance the project from our own capacity. Then a huge appreciation was received from the whole county people with some bad issues as well. Though the own financing has a risk of putting our economy in a vulnerable position but the people was happy from their emotion. On the other hand, as about three-fourths of the cost of the bridge will have to be paid in foreign currency and it is not sustainable by self-financing, our finance minister simultaneously insisted that without WB, the project is a dream. Hence, a clear disharmony, disagreement and mis-coordination were observed in the cabinet.

 Sometimes, our PM alleges the involvement of Dr. Muhammad Yunus in influencing the WB funding as a row persists on the issue of Grameen Bank. As it is well-known that, Dr. Yunus attended Vanderbilt University, USA and maintains an amiable relationship with Hillary Clinton; hence, there may be a conception that Dr. Yunus could influence the WB funding through his lobbying. Recently, our finance minister alleged Dr. Yunus for sluggish pace of foreign investment and then withdrew the statement. Nobel laureate Dr. Yunus is worldwide respected person for his concepts of microfinance and social business. So, the altercation between government and such a respected person undermines our image as a nation. So, if there is any fact of his involvement then that should be substantively proved through a probe and revealed publicly. If not, the issue of alleging him for everything must be seriously waived.

When World Bank came back to this project on condition, government agreed to implement WB’s conditions. Adviser Dr. Mashiur’s dilemma in the media to go on leave and no proclamation from PM’s office about his leave has created much comedy and gave issues to opposition to criticize the government. Minister Abul Hossain’s resignation when media is busy with the funeral of prominent writer Humayun Ahmed, the reshuffle of cabinet and announce that every minister was very successful to their job actually creates humor and dissatisfaction to the people’s mind. Hence, to compromise with the WB by agreeing with its conditions without any through probe against the accused is an ethical defeat of the government. The UK based magazine ‘The Economist’ humiliated our country’s image by publishing some news negatively. The Wall Street Journal and international newspapers often publishes news on Padma Bridge and WB issues focusing on the corruption and graft and finishes the report with a conclusion of our corruption records of the past. Consequently, as a nation it is very much humiliating and disgraceful to us.

Very recently, chairman of the Anti Corruption Commission (ACC) insisted that the inquiry team found substantial clues to corruption conspiracy regarding appointment of a consultant for the PMB project. In this context, the government seems to be gradually turning off its focus from construction of the Padma Multipurpose Bridge Project within its tenure, realizing that the graft-related dilemma with the World Bank (WB) is unlikely to be resolved shortly. This state of deadlock is substantiated by the failure to bring any positive result by the government on the sideline of the World Bank-International Monetary Fund (IMF) conference in Tokyo. So, general people are in dark about the latest development of much sought PMB project.

The major portion of our annual development budget is donor-funded. Thence, to overcome these deadlock situations in future the government should earnestly try to reach in a position where we ourselves can manage the fund from our economy to build such big infrastructures. But, at the last, if I ask what is going on in PMB project, what the answer will be from the authority concerned. 

A abridged and edited version of this writing was Published : Sunday, 02 December 2012, The Financial Express, Bangladesh

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