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The U.S. Agriculture Department cuts its estimate of corn crop yield per acre in the U.S. by 15.5%, as a result of the severe drought in 2012. Agriculture Secretary Vilsack, says the situation for farmers is better this time than during the last drought in 1988. Now 85% of farmers have crop insurance compared to 25% in 1988. The Agriculture Department estimate is for a 3-4% increase in prices in 2013. Capital Economics says the impact on GDP in the U.S. will be about 0.1%. Because 40% of the corn crop goes into ethanol production there is renewed debate about the 2005/2007 Renewable Fuel Standard, which requires 13.2 billion gallons of corn based biofuel be made in 2012. Worldwide the bad weather conditions in Brazil, India and Russia are worsening the outlook for food supplies. The U.N. Food and Agriculture Organization says global food prices increased by 6% in July 2012, with corn prices up 23%.

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The benchmark price of U.S. crude oil dropped to $31.41 a barrel on January 11, 2016, as oil prices continued to drop sharply following a slowdown in China, appreciation in the U.S. dollar and no cuts in production from Saudi Arabia. Analysts expect a crisis for energy producers that is deeper than ones in 1986, and five plunges in oil price all the way back to 1970. With the oil prices at $30 and expected to drop below $30, the companies that took on a lot of debt have no choice but to keep up production. In the process many may find themselves in bankruptcy. Private equity with capital of $100 billion is likely to come in at this point to buy cheap assets without the debt, say analysts. U.S. banks energy portfolios are small, with Wells Fargo energy exposure only 2% for oil and gas loans in the third quarter of 2015, or about $17 billion. Loans that are rated "sub-standard. doubtful or loss," are projected at 15% of loans to energy producers, about $34.2 billion, in a biannaual review by banking regulators. The unusual aspect of this energy price slump is that production is not declining with falling prices- oil production in the U.S. was estimated by the government at 9.2 million barrels a day in Jan 2016- 1% higher than at the beginning of 2015 when prices were over $40 a barrel....

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Jaishankar was asked at the 2021 GLOBSEC conference in Bratislava in 2021 why he thinks anyone will help India in case of a problem with China after it did not help others for Ukraine. Chancellor Scholz of Germany cites Indian Foreign Minister Jasihankar's remarks in Bratislava, Slovakia, in 2021. Jaishankar said- "Europe has to grow out of the mindset that Europe's problems are the world's problems, but the world's problems are not Europe's problems. That is if it is you it's yours, if it is me it is ours. I see reflections of that. There is a linkage today which is being made. A linkage betwen China and India and what's happening in Ukraine. Chia and India happened way before anything happened in Ukraine. The Chinese do not need a precedent somewhere else on how to engage us or not to engage us or be difficult with us or not to be difficult with us." These are Scholz's remarks at the Munich Security Conference. Scholz says Jaishankar has "a point."  "This quote from the Indian Foreign Minister is included in this year's Munich Security Report and he has a point it would't be Europe's problem alone if the law of the strong were to assert itself in international relations." To be credible European or North American in New Delhi or Jakarta, it is not enough to emphasize shared values. "We generally have to address the interests and concerns of these countries as a basic prerequisite for joint action. And that's why it was so important to me to not merely have representatives of Asia, Africa and Latin America at the negotiating table during the G-7 Summit last June. I really wanted to work with these regions to find solutions to the main challenges they face growing poverty and hunger, partly as a consequence of Rusia's war, as well as the impact of climate change or COVID-19. There is another side to this -Scholz and Germany's president Frank Walter-Steinmeier are from the social Democrats party which has sought closer cooperation with Russia, and also carry a great deal of ambivalence for the war. America is not fighting this indirect war in its neighborhood, Germany is. And some of the roots of this conflict go back to the Napoleonic invasion of Russia in the 1800's period and the German invasion in the 1940's. Macron is even more ambivalent in his position and he has remained this way from the beginning- not committed to humiliating Russia. In a way it is the position of the Social Democrats from the historical context of Germany's invasion of Russia, and Christian Democrats eagerness to create a German recovery with low cost Russian energy that created the dependence that Russia sought to use. In what it sees as the unfairness of NATO being allowed to expand right next to its borders. Because of a sense of righteousness on both sides- Russia of the Soviet period failing to see the feelings of a Budapest in 1956, East Berlin in 1953, and Prague in 1968, sees little wrong in an invasion of Kviv. And with it all the biography of Brezhnev the last leader of the Soviet Union, describes that very struggle in the Great Patriotic War the soviets fought against Nazi Germany which was fought by Ukrainians including Leonid Brezhnev with great will and purpose against all odds.  Cambridge historian has written the history of Europe that Scholz is cited to be reading in 2021- Europe The Struggle for Supremacy 1453 to the Present.  It shows Europe since 1453 engaging in balance of power of European powers, Sweden Denmark, Russia, Austria, Germany, France, Britain, Turkey, continually for 500 years. Europe simply forgot its own history. Asia including Japan, China, Indonesia and India, simply emerging from the situation of falling behind in science, technology, and the industrial revolution and building their economies with the help of the US since the Meiji Restoration in Japan in 1868. The Balance of Power Simms says was maintained for 500 years is simply based on no country allowed to act with impunity, no country allowed to do whatever it wanted because of its position of strength at that moment or period of time. In that situation all other powers regrouped to keep the balance from being upset. The war in Ukraine is also likely to end in a way that is consistent with that which Brendan Simms writes about because this has not changed now for over 500 years. Biden knows this and it has fallen on America to shoulder the burden for this in the last 150 years, Scholz is aware of this, Modi in India sees this, and Jinping in China realizes this even with its concerns about Taiwan.   ...

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China's GDP growth rate slowed to 7% in the 1st quarter of 2015, compared to 7.3% in the 4th quarter of 2014. China's Office of National Statistics reported industrial production growth at 5.65% year over year in March 2015, and fixed asset investment in the 1st quarter at 13.5%. The statistics agency reported unemployment at stable level of 5.1% for the 1st quarter 2015. Experts say the low unemployment is the one positive sign in the economy, easing pressures on economic policymakers to take action considering the high debt levels in the economy. As a result China can pursue selective monetary easing efforts and smaller, selective, better targeted stimulus.

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1. ACCELERATION OF DECLINING PRODUCTION FROM GULF OF MEXICO AS DRILLING RIGS LEAVE THE GULF. Offshore oil production mostly in the Gulf fell by 19% between 2003 and 2005. Natural gas production fell by about 22% from 2001 to 2004, according to EIA. The drilling rigs jack-up rigs and deep-water rigs that drill for oil and gas are declining rapidly in the Gulf of Mexico. There were 148 rigs in 2001, now only 90 remain with more leaving soon. Many of the rigs that are leaving are jack-up rigs, used for drilling for natural gas in shallower waters, and this should lead to a pronounced effect on natural gas production. Gulf Gas reservoirs that use these jack-up rigs are quickly exhausted requiring new wells to be drilled to just maintain production. Fewer rigs available mean upward pressure on natural gas prices more so than oil because gas is a market supplied locally. EIA estimates natural gas will move from recent close (July 5, 2006) of $6.10 per million BTU's to a price of $10.00 by end of 2007. This compares with a price in 2001 of $2.43. Hurrican related disruptions pushed oil prices up by $10 a barrel for hurricanes Katrina and Rita, in each of two years, so there will be continued upward pressure on oil price from this acceleration in production declines in the Gulf. 2. SEA CHANGE IN THE OFFSHORE DRILLING RIG MARKET, IN DAY RATES, IN PREFERRED DRILLING LOCATIONS, AND IN RIG PRODUCTION. The hurricanes Katrina and Rita destroyed 5 rigs. What is a bigger effect is that drilling companies are signing longterm deals with companies overseas. Global Santa Fe Corp. for instance signed a deal last month to send 4 jack-up rigs to Saudi Aramco at $160,000 per day, for 4 years. Ensco International will send one to Tunisia at rates approaching $200,000 for 2 years. There are hotter prospects for petroleum offshore in the Middle east, and in Africa, whereas the easier drilling spots in the Gulf have already been tapped. Worldwide 91 major offshore rigs are under construction compared to 10 in 2003 according to ODS-Petrodata. The new rigs may take till 2009 and may have delays so as to come out after 2009. They cost $160-190 million for one jack-up rig and about $600 million for one deep-water rig. All this has pushed day rates throug the roof. BP PLC agreed to pay Transocean Inc $520,000 a day for three years for a massive drill ship. The same ship cost BP PLC $185,000 a day in 2004. The drilling ship is as large as 3 football fields and can drill in oceans upto 10,000 feet deep. ...

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A study published in the British journal Lancet shows that the number of people suffering from diabetes went from 153 million in 1980 to 353 million in 2008. The study shows the U.S. having 24.7 millon diabetics in 2008, which is three times the number from 1980. About 70% of this is from population growth and aging, and the rest from obesity, lack of exercize, changing diet. The American Diabetes Association estimated the cost of treating diabetes in the U.S. at $174 billion for 2007. About 138 million diabetics live in China and India. In India there is an additional cause- malnutrition in early childhood years for the poorer segment of the population. European countries have done better than the U.S., Mexico, India and China. S. Korea and Thailand have done better than other Asian countries. And this is attributed to healthier lifestyles, diet and less obesity in these countries.

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U.S. president Obama called Libya and the policy of not following up on helping establish a stable democratic government in Libya his biggest mistake. Kristof of the NYT says people looking back would say Syria and not establishing safe zones is Obama's biggest mistake. He describes the 470,000 deaths in Syria as a huge tragedy that could have been avoided to a large extent by setting up safe zones. In addition the UN estimates that millions of refugees on a scale similar to the partition of India in 1947 were created.There is bipartisan opinion on this. Kristof cites General Cartwright's opinion in a conversation he had with Cartwright that this should have been done. Others who agree are Madeleine Albright, Bill Clinton's Secretary of State, who spoke at the Democratic Convention about how America helped change her life as a young refugee after Russia's invasion of Czechoslovakia following Prague Spring. Albright says force should be used carefully so as not to aggravate the situation but action taken where needed, something that was done successfully under Bill Clinton in the Bosnian conflict following Serbia's ethnic cleansing policy under Milosevic. Not only that, with the diplomacy of ambassador Holbrooke Clinton was able to negotiate the peace accords that hold till today- a huge achievement.  Kori Schake, director of defense strategy in the George W. Bush White House also agrees. This would have improved U.S. relations with Turkey as this was a key Turkish request. And it would have reduced the dimensions of the refugee crisis in Europe, which has hurt the European Union. The Brexit "No" vote many in Britain have attributed to ads showing refugees in endless numbers streaming across Europe's borders. Similar ads were used in Austria's elections. Kristof points out that Secretary of State Kerry's job of negotiating a peace is difficult in these conditions. Another issue raised by Kristof is the lack of Obama's leadership in helping the refugees in Jordan, Lebanon and Turkey, as he points out only 41% of this is funded. David Miliband former British Foreign Secretary, who heads the International Rescue Committee , says 200,000 Syrian kids are growing up in Lebanon without an education. George Washington counseled against getting involved in the wars on the European continent for a young nation, this advice was not followed in the Reagan and other administrations without showing the carefulness needed before action is taken. As Hillary Clinton has once pointed out the situation has resembled a pendulum swinging in the other direction under president Obama, and former Defense Secretary, Panetta, has expressed similar views. Hillary Clinton and Leon Panetta, Gates, Gen. Jones, served in the first term of the Obama administration, many of these mistakes were made in the second term by president Obama and his White House advisors Dennis McDonough, Valerie Jarrett who clearly lacked the deep foreign policy experience of Hillary Clinton, Leon Panetta (who served under Bill Clinton), and Gates who served under many presidents). ...

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This was one of the last reports written by Anthony Shadid, New York Times foreign correspondent, before his death in Syria. It covers the Islamist movement's shift to modernism and incorporating an outlook that includes ideas of liberal democracy from Britain, as seen from Tunisia. No longer is the main source of ideas coming from Egypt. A diverse group of thought is being developed in Arab and North Africa, and in places like London, where emigres from the Middle East during the years of repression gathered to discuss ideas for the future. Said Ferjani's as one of these emigres is one of sources of the new thinking and approaches of Islamist thought.

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IMF research by Ocampo and Erten shows that when adjusted for inflation since the 1970's, the prices of metals have remained about the same, food prices down 58%, and energy prices up 163%.

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PM Modi visits Gandhiji's Sabarmati Ashram in Ahmedabad and inaugurates the $145 million Sabarmati Ashram renovation project. In June 1917 Mohandas Gandhi bought land on the banks of the Sabarmati river to build the Ashram. It was the central location for Gandhiji's struggle with the British for Hind Swaraj, independence from Britain. The ideas in Gandhi's Hind Swaraj written in 1910 during the struggle for South African workers was implemented from here including the Satyagraha struggles, negotiations with the British Raj, Dandi march to the sea in April 1930 to protest the tax on salt. It was originally on 120 acres which by 2020 were reduced to 5 acres. The new project will expand the Ashram to 57 acres into a major worldwide center for learning about Gandhi's life and ideas and the role for gaining Bharat Swaraj or freedom and its role in Bharat's future for a new generation of youth. Leaders including Sardar Vallahbhai Patel and Narendra Modi look to Gandhiji's ideas for inspiration and guidance in the everyday administration of the country. Gandhi's ideas anticipate not just the aspirations for freedom with taking responsibility for one's own actions, but also the movements for respecting nature through climate change action, uplifting of rural areas, and the improvement of the living conditions of working people and families everywhere in the world. The Ashram exhibition shows documents including letters to the Viceroy in the 1920's showing the budget for the Empire in India and asking why so much went to defense and military and so little to uplifting the lives of the people, in education, health and infrastructure. Having seen it at the Ashram one could say such a direct letter to the head of a large nation, as the Viceroy in India was then is unimaginable today. In some ways emails and electronic communication have made contact with officials and government less not more and created a seemingly insurmountable gap today. ...

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A German reporter questions the value of the G20 meetings following the violence on streets at the last Hamburg meeting. He says the first G20 during the global financial crisis was useful but later meetings have not lived up to the hope for discussion and search for solutions to world problems. Global trade is at the top of the agenda following the tariffs dispute between China and the U.S. Divergent interests of participants are a problem. Would going back to G-7 in private meetings be a solution asks this reporter.

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The lower oil prices in 2015 helps lower the current account deficit, which reached 7.9% in 2013, to 5% projected for 2015. Inflation is projected at 6.8%. GDP growth of 3.5% is expected for 2015. Turkey imports oil amounting to about 6% of GDP making for a large impact. Weakness is in the area of manufacturing, as Turkey's high tech exports are only 2% of manufactured exports, according to the Economist. About 1% of Turkish students have advanced computer skills. With problems in Brazil and Russia, money flowing into emerging markets is giving Turkey a second look after the emerging markets crisis in early 2014, when the lira slumped and interest rates had to be increased. The economy is recovering in 2015 from that situation. Two major beneficiaries of lower oil prices in emerging markets are India and Turkey in 2015, as both economies struggled with a large oil import bill.

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Hispanic immigrants make up a big part of the construction industry and a big part of industries like carpet making in Georgia. This has been hit hard and jobless rate for Hispanics is 6.9% according to the Labor Department up from 5.5% in April 2007. States with expandig Hispanic populations like Florida, California, Georgia and Nevada are hit hard by Hispanic job losses. Overall the jobless rate has gone up from 4.5% last year to 5% during th same periodand when one takes out the Hispanic component the jobless rate is down much less, which also tell us something about why the pace of the economic downturn is felt less among the whites and the rest of the population, because the construction industry got hit the worst and the Hispanics especially immigrants who dominate the construction industry are taking the brunt of it. The subprime story plays up here as well. From 1994 to 2006 the rate of Hispanic homeownership climbed to 50% frm 41% according to census data, at a rate more than double for the increase amon non-Hispanics. By 2006 47% of the loans issued for home purchases by Hispanics were subprime or loans with poor credit histories, double the rate for non-Hispanic whites, according to a paper by the Joint Center for Political and Economic Studies, only exceeded by African Americans. In 2006 homeownership fell among Hispanics and one in 12 mortgages made to Latino households in 2005 and 2006 is likely to fail according to Catherine Singley, a policy fellow at the National Council of La Raza, an advocacy group in Washington. Georgia has one of the heavy concentration of new Latino immgrants, with a 70% increase in the state's Hispanic population between 2000 and 2007, according to census data. From one fifth of the construction work force in 2000 Hispanics made up one third by 2006 according to the Economic Policy Institute. Among foreign born Hispanics construction was responsible for 46% of the growth in employment from 2004 to 2006 according to Rakesh Kochhar, an econist at the Pew Hispanic Center, which tells us that the new Latino immigrants dominated the construction industry in places like Atlanta and in the rest of the country and are now getting hit the worst. Not only construction but industries that parallel the growth in construction like carpet making based in Dalton, Georgia, were dominated by Latino immigrants, so that as construction fell these towns and Latinos there are hit hardest. Investment manager El-Erian of Pimco points to employment as the key the critical thing to watch for the next 6 months and its useful to see that unemployment has increased by about half a percentage point to 5% from 4.5% April 2006 to April 2007 according to Labor Department data. As most of this unemployment has probably been taken up by the new Latino immigrants to the USA its probably not changed much excluding that component, which is possibly why the economy has not felt like it is in a recession when all around the signs of recession or what causes a recession are evident around us. Another way to say this is that there are built in hidden mechanisms of the American economy in its present form such as immigration, and possibly others that act as delay mechanisms that throw the recessionary impact back by anywhere from 6-18 months depending on how they operate and can blind one about the reality of oncoming storms. This was to be seen in 2005 for the economy with consumption spending and mortgage industry excesses, and which is why Pimco decided in 2005 at its spring meeting, that the big secular story was about the economic downturn. It actually took until 2007 for this to occur because of similiar things to what we are seeing now in terms of recessionary pain, then the new structured investment vehicles and other ingenious innovations in the mortgage industry may have extended the boom and delayed the economic downturn being felt till 2007. There is a lot of grief among Hispanic people. The numbers tell the story. For the 19 million Latino immigrants in the USA...

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A local government vehicle in China, Sixth Division of XPCC fails to make a bond payment in August 2018. This is the first such instance of failure to make a bond payment for a local government vehicle in 2018. Economists estimate China's total debt at 242% of GDP in 2017, and government efforts to tighten liquidity and reduce support for overextended local government investment vehicles.

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Jose de Cordoba of the WSJ provides this excellent story on the nature of the migration crisis in the U.S. that is creating political divisions in the U.S. What is causing this surge in migration to the U.S.? Cordoba provides some useful insights to understand the nature of this problem. Nine out of ten migrants in Guatemala which sends most of the migrants from Central America are moving north from Guatemala through Mexico to the U.S. for financial reasons, it points out. Only 10% are because of violence in the region, the rest for financial reasons according to the United Nations International Organization for Migration The jump in apprehension of Guatemalans at the American border shows a surge from 15,000 in 2007 to 236,000 in 9 months of 2019, according to U.S. government data. The surge began in 2008 and jumped in 2014 after U.S. court rulings that first required migrant children to be allowed to join relatives in the U.S. followed by a ruling in 2015 that allowed a parent to join the children and allowed court proceedings to take place that takes years. The result was that smugglers advertised on radio and families sold small plots of land to join relatives in the U.S. who had gone before them. The migration is also specific to certain areas hit by damage to crops, including coffee crop from drought, or certain towns that simply sent more people simply for financial reasons advertised openly.  For 8 hours of work a migrant could make at $12 per hour amount of $96 per day, in Guatemala the daily wage would be about $5.  Overwhelmingly it is financial reasons or economic opportunity that sends migrants north. After it became known that kids could help migration the people in family groups apprehended at the border jumped from about 40,000 in 2015 to 390,000 in fiscal 2019. Smugglers charge $8600 per adult and half that for a child and an adult that can be dropped off at a checkpoint. The efforts of president Trump to close the border to this migration include having Mexico sign an agreement to police its southern border with Guatemala using its newly setup National Guard. As a result the migration has actually surged in 2019 with migrants seeing this as their one last opportunity to join relatives in the U.S. or to migrate to the U.S. The Trump administration tried separating families because of the loophole in the law that allows children to be not deported and parents to join their children. But this created a public outcry and the effort now is to close the loophole in the law. It is also strange that as many migrants are coming from one town Joyabaj  with population 100,000 as from Guatemala City the capital population 2.5 million. In fact the economy has grown by 3.4 % a year in Guatemala and efforts have been made to improve conditions with the help of donor countries in the West for several years, though the drought conditions exist. The situation is similar to that in Europe. If one looks at the violence by gangs in central American region after the end of the guerilla wars and compares it to the wars in Syria and Iraq, one can see how humanitarian concerns preceded what eventually turned out tobe a full blown migration for economic reasons. Initially chancellor Merkel adopted a humanitarian stance but failed to recognize that there was another side to his situation that would attract a wave of economic migrants from places as far apart as North Africa to Afghanistan. Poverty has existed in these regions for many many years before the current migration, with drought and lack of economic opportunity going far back in time. Merkel only recently recognized this problem and the new CDU leader Kambrauer has clearly recognized this. CDU policy shifted in 2018-2019 with curbs on economic migration that has reduced it to a trickle. This process is underway in the U.S. at its border with Mexico and for Mexico with its border with Guatemala. In the short run Europe and the U.S. are paying a price. Not just in the way it has divided each country with a far left and a far right eroding the centrist parties that existed before. In some cases centrist parties that were popular on the right and the left now hve leaders from a far right or a far left faction within the centrist ruling parties. Boris Johnson in Britain, Trump in the U.S., leaders in Italy, Austria and Hungary. Or as in Germany and Spain new far left or far right parties causing the centrist parties to dwindle in influence or as in Germany this combined with a shift to the Green Party in Germany and Liberals Party in Britain as a show of disapproval for how the migration issue has been tackled.  The Economist in a July 2019 issue also points out that the country's own citizens have fared worse with migration. It shows how the Conservative Party's austerity cuts for welfare budgets was popular in Britain as long as eastern European migration at high levels in Britain were allowed starting with the Labour party under Blair. This disproportionately hurt the middle class and the poor after the hit already taken from the faulty banking caused recession. With the drop in migration it is now felt by a majority in Britain that the austerity cuts have just gone too far and a mood is set in to restore many of the cuts and fund public services. Meantime some of the damage has been done and will take a decade to correct as the issues that mangled the centrist parties and led to fragmentation on views of what society should look like have taken place with Brexit and high levels of poverty, income inequality in Britain, lack of investment in infrastructure with overallocation to tech with declining productive benefit for every additional dollar spent. ...

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Average wage gains for rural areas about 5% between 2001 and 2003, and a loss of 2.5% in wages for the poorest 10% of the people in China are shown in information from the World Bank. This will be of concern to Chinese government as it moves forward with current policy.

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Aizenman in this must-read describes the National Soda Summit and the presentation of one man Todd Putnam, a former executive from Coca-Cola that throws light on one of the truly important things that happened in the lives of Americans in the postwar period of development and growing prosperity. This is the development of marketing and advertising and its singular application in the case of Coca Cola to promoting sugary drinks. It is also related to what even business people describe as the single biggest problem in America. And it is happening at a time when the story is being repeated in developing countries such as China and India. Putnam describes the exhilaration, he and other Coca-Cola managers felt when the graphs at internal presentations showed Coke passing milk in consumption per capita in America. Several other facts stand out in Putnam's description of his experience- the ignorance on health issues among his marketing peers, the huge marketing prowess and dollars brought to bear once a goal such as increasing per capita consumption of sugary drinks was set- he was hired out of Purdue by P&G and worked at Disney before joining Coca-Cola- and the focus on the 12-24 demographic with 90% of all soft drink marketing targeted at this segment. What he regrets most is the focus on minorities who suffer some of the highest levels of obesity in America. No mention is made of the efforts underway in developing coutnries such as China and India which are seeing a surge in obesity rates and diseases such as diabetes. Coca-Cola says 41% of its sugary drinks are low calorie, but compared to milk, fruit juice and other healthier alternatives where does this rank? The cost to the nation's health care system alone would show that the performance of Coca-Cola's stock price over the postwar period came with a price tag that was never even thought about, when healthier alternatives as health drinks companies have found sell well when well marketed and formulated for different groups....

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Fred Hiatt of The Washington Post describes U.S. president Obama's mishandling of Syria during his second term as president leading to the situation today.

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This editorial in the Wshington Post is sharply critical of the Obama administration's policies of inaction in Syria and Iraq. It says president Obama and his administration will have to answer for the policies to the American people and the people of the Middle East and Europe.

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Under a new program to increased spending on healthcare from 1.3% of GDP to 2.5% the Indian government plans to provide free pharmaceuticals at state run hospitals. This is expected to cost $5 billion over 5 years. Initially 350 drugs would be on a list of essential medicines and would be purchased from generics manufacturers in India. Dr. K. Srinath Reddy, heads the committee advising the Indian government on healthcare. He says this will help improve access to medicines for the vast majority of the people. Estimates show 70% of out of pocket medical costs for Indians come from spending on drugs. About 40 million people are pushed into poverty each year because of the high cost of medicines, says Dr. Reddy. He said that in 1984 31% of the medicines at government run hospitals were provided free to admitted patients, dropping to 9% in 2004. For outpatients this dropped from 18% to 5%. The free medicine program would be part of a larger universal health care program to be introduced over the next decade. India's large generics pharmaceutical industry makes the provision of free medicines on a large scale a feasible option in India because of the lower prices, with additional pricing advantages when purchased in larger volumes by the government. This would also have a major impact on the quality of healthcare in the country of 1.2 billion people for a relatively small investment. It also promotes a sense of fairness and equal access because the benefits of decades of modernization have been unevenly distributed and because of widespread poverty....

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Procter and Gamble's new CEO, Robert McDonald, set a new goal of over half a million customers a day for five years, hoping to add people in remote villages of China, India and other developing countries for its shampoos, toothpaste, diapers and other products. In many places people are not even familiar with the products like diapers, and need education about the benefits and use. McDonald sees the potential as just "absolutely amazing, amazing." And under the prior CEO, Lafley, progress was made in Mexico, and developing countries are now 32% of the $78 billion in sales, up from 23% four years ago in 2005. Sales are doubling every 4 years in these countries. In Mexico the marketing at low price points throughout Mexico has moved sales per capita to $20, which compares to $1 for India and $3 for China. The idea is to move China, India and places like Nigeria up to the Mexican level. McDonald sees sales growth of $40 billion with this move. Distribution is a challenge, and new ways to use these products and their design for low price markets and local customer habits is needed to make this a success. Families that don't use diapers are encouraged to start using them only once a day at night to promote restful sleep, and young girls are introduced to feminine hygiene pads. Shampoo is in tiny packets for 1-2 uses and may cost no more than an egg. Even though this puts P&G in head on competition with better established Colgate and Unilever, P&G executives see the efforts of all 3 companies actually helping to educate the people in using these products and broadening the market for all. ...