Sunday, July 12, 2015

News Summary : July 13

                                                             
1: Economy : Recently decision has been made to allow EPFO to invest 5 to 15% of incremental deposits into equity or equity linked instruments. NPS is allowed to invest in equities ( in small amount ) . Equity investments come with chance of higher returns but contain more ricks.

2: International : China's policy on belt and road initiative has regional and global implications. India is apprehensive about Gwadar-Kashgar economic corridor which passes through PoK. However , BCIM corridor has potential to help India’s bid to develop NE Indian region. BCIM will connect Kunming ( Yunnan ) with Kolkata through Myanmar and Bangladesh. BCIM will reduce Chinese dependence on Gulf of Malacca for cargo movement , which is under USA's influence.

3: India-Krygyzstan are to co-operate on combating terror through defense co-operation . Annual joint military exercise will be conducted to boost co-operation.

4: Poverty : In backdrop of SECC a valid question asked is how poverty reduction can be associated to development. Poverty has other dimension other than economic. Poverty should be determined on control over the factors that determine life chances of people. It should be kept in mind that development focus has been incorporated by developed countries in form of IMF , WB . USA led the economic world order after world war 2 e.g. Marshall plan , Truman Doctrine. Idea was to expand capitalism with control over science and technology .

5: Greece issue : Greece joined EU in 2001 with obligation to fulfill criteria of Maastricht treaty 1992. Greece can not devalue it's currency and raise interest rate to tide over monetary problems. It depends on troika i.e. ECB , EC , IMF to overcome financial difficulties. Greece lacks central bank which can provide liquidity to it's banks independent of ECB control. Problems can be seen in form of 27% contracted GDP since 2009 . 25% unemployment rate with youth unemployment touching 60% presents difficult situation s well. Greece leaving EU will be bad for EU and European unity.

6: Sri Lanka : Parliamentary elections are scheduled for August 2015 . Mahinda Rajpaksha will contest the election . This is being seen as President Sirisena going on back foot. Present ruling coalition has Rajpaksha supporters in form of faction inside SLFP . Present ruling co-alition name is united people's freedom alliance ( UPFA ) with main constituent in form of United national party ( UNP ). Sri-Lanka faces task to heal civil war wounds. Political and ethnic issue continue to find prominence for now.


Expert comment : Main articles revolved around China , Poverty , SL , Greece . Present government if focusing more on development to sort out poverty issue. Other dimensions should find place in policy framework , at least should be publicly discussed . Development criteria may face limitations and even become tool to continue poverty , exploitation and inequality. Outcome of Greece issue will see intense negotiations in coming days . So the news will sustain longer for now.


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