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The experience of Nestle and other consumer product companies selling at low price points in Indonesia and other developing countries.

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Raghuram Rajan, former chief economist of the International Monetary Fund, is appointed the new chief of India's central bank in August 2013.

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Bill Gates describes the successful work of 2 million volunteers and millions of children and parents in India's poorest rural areas to get all the children in India vaccinated for polio. This includes the work of the Bill and Melinda Gates foundation. He decribes his visits to India and realizing over time how bringing vaccinations, healthcare, improvement in agricultural development would enable hundreds of millions of India's children to participate and contribute to bringing out India's full potential. Harnessing their full potential is the next big challenge in India's development and modernization.

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With the aggressive actions taken along the 1600 kilometre border in eastern Ladakh by China's People's Liberation Army, India needs a younger soldier to protect the border at high altitudes in below freezing temperatures. The entire 3500 kilometre border in the high Himalayan regions from east to west need technology driven surveillance with soldiers fit and ready for such duty. Agnipath's goal is to bring down the average age in the army from 32 years to 26 years to better reflect the youthful population in India. A tighter better disciplined force with high tech is needed. Bringing in more and new recruits is intended. Both the 25% of recruits retained after 4 years benefit and the 75% benefit. The 25% will have opportunities to move up the ranks. The 75% who come back out of the military will have the advanced technical training and courses, certification, that would make them attractive to the public and private sector companies in 2026 and beyond when India's economy will be 50% larger than today at growth rates of 10-12%. This is already seen in the way technologically trained military recruits from World War II in the US Army, Navy and Air Force were quickly absorbed at high salaries in the high growth period of America 1950-1970, with incentives like the GI Bill. Modifications that could be discussed- The 25% retained after 4 years. There is no magic number it could be raised to 30 or 40% during these post pandemic years and then lowered to 25% as the economy grows rapidly by 2025, or kept at 30% without changes, a number of options could be open.The financial aspect of the training can be modified where the 25% retained could have these 4 years added to their years for calculating pensions. The 75% are given 1.2 million rupees and even this can be adjusted upwards so that they could start businesses as entrepreneurs or have the time to pursue higher education before taking up for example with free education to enhance their education in areas of interest as was given by the GI bill to Americans in the armed services after World War II in 1946. Ideas from the GI Bill signed by president Franklin Roosvelt in 1944- Adding one year of unemployment payments, low interest loans to start a farm or business, full tution and living expenses for college. In 2008 the Veterans Act in the US continued support for education of servicement by making eduction free at a public college or university.  The Roosevelt GI bill benefited about 7.8 million servicemen in the US armed services. 2.2 million went to college, 7.6 million took training programs. It was an impressive achievement. No scheme is perfect there are budgetary constraints such as how to manage pensions to give the armed services the best possible funding including the training and course capabilities that also need good financing and the higher pensions for armed services. Every political party  government around the world without exception will have to face these budgetary constraints and the goal is to do right by the armed services providing the income and opportunities they deserve. Was a decent effort made with the right goals set? This is how these matters of national interest for India and the Free World that includes South East Asia, Africa and Latin America, should be discussed.    ...

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Security is at the heart of India's foreign policy. S. Jaishankar points this out at Thiruvanathapuram. He says this was true of the effort at Balakot and even in the midst of Covid at the Line of Actual Control with China when India sent up enormous numbers of troops to defend the border. This is also behind the stand with China that security and LAC comes first in all relations with China. Trade and exchanges all come in the context of LAC, settle the LAC issues first then we can proceed with better bilateral relations, this is what India is telling China.  There are good reasons for this. India has a large border in the most formidable terrain of the Himalayas which is also close to the plains of India in the LAC with China. Any difficulties at the border would weaken India's secuerity and weaken development efforts in the same way that Japan sought to weaken Chinese development through invasion in the 1930's. Tibet looms out of the past. When China invaded Tibet Nehru's couple of pages in Discovery of India on China show that he had no idea of the China that had emerged with Mao and the CCP in its historical struggle against Japanese nationalists and imperialists. He had an idea of China that came from the Buddhist period and India's links from the past. The ruthless Japanese invasion that China confronted on its soil, and British colonial incursions before that, had already transformed the China of the past, which now under Mao in 1948 may have sought more defensible borders by extending them to Tibet as a buffer state. Historically the British had never tolerated Russian or other European or Japanese interference in the border states such as Tibet. There was also the question of capacity. By the time of the invasion of Tibet in the early 1950's China had already fought the Korean War with the US. India's army and defense forces were just coming out of partition and ill equipped for the task of defending the borders in Tibet region. Current governments in a more normal setting cannot change this part of history, yet can take full recognition of the facts that this has created. A strong defense has to be created for defending a border that extends for thousand of miles now that China has unlawfully occupied Tibet. On it also depends a strong and vigorous development effort that helps build the kind of modern defenses as the economy grows and absorbs new technologies rapidly. Both defense and development go together, one cannot have defense without rapid modernization and development, and one cannot have rapid modernization and development without defense. A weak defense would lead to distractions in development leading to the lack of rapid modernization and development as the intruding power interferes in insidious ways in the internal and external links of the country. This is the lesson of colonial interference of western powers in Asia. As Brendan Simms shows in his new book, Europe - Struggle for Supremacy 1500 to the Present, it is also the lesson of a different kind of colonialism inside Europe since 1500, where weaker states inside Europe fell behind with interference in turns by the imperial powers of France, UK, Austria-Hungary, Prussia and Russia. Poland, Finland, Czech Republic in the past and even Ukraine today are just some examples of what can happen when one loses sight of this principle. Poland and the Polish Commonwealth in the 19th century, Hungary right down to 1956, and China in the 1910-1930, India in the 18th and 19th century were weakened internally even after recognizing the problem, so that recognition of the problem is not an adequate condition to prevent countries from facing such foreign interference. ...

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The US sends aircraft carrier group of the US 7th fleet with the aircraft carrier USS Reagan and destroyers on a freedom of navigation mission through the South China Sea. What is a freedom of navigation mission and what is the US goal? "Our presence in the Pacific is to demonstrate our commitment to a free and open Indo-Pacific," says commanding officer of the aircraft carrier USS Ronald Reagan, Captain Fred Goldhammer. Seen on a map the Paracel Islands are far from China's coast. They lie on the waters further south in the South China Sea closer to the coast of Vietnam and between Vietnam and the Philippines. Till 1974 the Paracel Islands were part of Vietnam. In that year China took control of these islands after a war with Vietnam. The name Paracel is of Portuguese origin on maps in the 16th century. There are 130 islands or reefs with total area of about 3 square miles spread out over about 6000 square miles of ocean in the middle of the South China Sea near the coast of Vietnam. The French had  weather station there in 1932. After independence South Vietnam controlled the islands. In 1974 the islands were taken over by China from Vietnam. The result is that by taking over the islands China put itself in the position it is in Tibet. In Tibet it has put itself right across the Himalayas in a position that interferes with security on the border with India in the Himalayas that for centuries almost going back to Buddhist times 2500 years ago had very little and most of the time no Chinese presence. The passes in the Tibetan region are at heights over 15,000 feet that were mostly inaccessible except by yaks and other animals for transport for most of the 2500 year period. This is true also of the Paracel and other islands in the South China Sea as they are right in the middle of the seas of open navigation used by traders before the coming of the Europeans and for ocean going trade since 1500. Britain and the US have enjoyed free and open navigation in these oceans which connect past the Philippines into the Pacific to the Japanese islands and on to Hawaii and the US Pacific coast. What the US and European allies are saying is that the free and open navigation of the seas has always been the case for the last thousand years in the Pacific. The taking of the islands in 1974 by China from Vietnam now put it up against the US and European allies, and their Asian allies, as it interferes with navigation in the open seas essential for trade and travel between Asia and the Pacific. This is how the Chinese invasion of Tibet and the taking over of the Paracel Islands have put China into the position of interfering in the normally open and free areas in the Himalayas and the Pacific. This is where the Quad group shares a common interest in preserving what always existed in history-  a free and open Pacific and a free and open Himalayas. It brings together the US, Japan, India and Australia which stretch all the way from the Himalayas and the Indian Ocean uninterrupted all the way through Indonesia to Australia and Japan and the US. From the Mediterranean through Egypt into the Indian Ocean all the way to the Pacific and the US keeping free and open seas for trade and navigation. Or across the Cape of Good Hope into the Indian Ocean and the Pacific to the US. ...

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This report on Danish wind energy company Orsted, looks at the journey of the largest developer of wind energy in the world from a company sending natural gas from North Sea to Europe to a joint developer with Denmark's Vestas of offshore wind farms. Last year Orsted, pronounced Ehrr-sted in Danish for the O and named after a Danish scientist, decided to invest $57 billion in offshore wind farms by 2027. It was not easy and the path required a bold vision and bold action to invest in wind energy for the long term even as debt piled up from losses in natural gas competing with coal, climate change committments were not yet strong, subsidies were required to make wind energy competitive, and debt was piling up. It would take a decade of hard work and technological innovation to produce wind energy that could outcompete coal and natural gas on cost without subsidies. The year is 2009 with the Climate Change Conference in Copenhagen. The predecessor company to Orsted was losing money in natural gas with lower cost coal energy generation in Europe at the time. Yet the mood was changing governments were willing to invest in renewables. In 2012 a new CEO Paulsen did a review of 12 businesses of this Danish energy company and decided wind energy was the only one with long term prospects. The Copenhagen Climate Change Conference created new awareness for the need to come up with a long term solution for energy that has no negative health effects and is renewable. That Conference set a goal of 20% for renewable energy by 2020 in the total mix for Europe up from 14%. Paulsen saw an opportunity in the crisis at the company then called Danish Oil and Natural Gas. The new company was called Orsted and the old divisions in fossil energy were sold to invest in wind farms offshore. The way Paulsen saw the situation was that the company had to take radical action whether it wanted to do so or not. By 2012 Danish pension funds were investing in large offshore wind farms of Orsted, taking a stake of as much as 50% in the Nysted wind farm. The Danish government which owned 80% of Orsted thought its projects were risky. Hard work with Vestas which builds the turbines in Denmark paid off in developing a huge new turbine that would bring costs down 65% comparing 2020 with 2012.  In 2018 the European Union was spending about 92 billion euros or $112 billion on energy subsidies including to wind farms. Britain also heavily subsidized offshore wind farms such as Hornsea 1 at about $198 a megawatt hour for 15 years double the electricity price in recent years. Windy conditions and shallow waters in the North Sea were favorable. Technology was being developed with Vestas which would reduce the cost each year. By 2016 Orsted was listed in Copenhagen. The remaining oil and gas business was then sold for $1 billion. The returns are less in wind than coal and natural gas- about 7-8% a year but the big thing is that there is certainty in this compared to coal and natural gas which are volatile and uncertain. The lesson companies are learning in renewables is that with solar and wind technology can. bring down costs, a lot of hard work and creative work lies ahead, that crisis can be turned into opportunity for companies that can be focussed enough to produce results. ...

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Fuel efficiency rules require average fuel efficiency in the U.S. of 35 mpg by 2016. The debate is now on what to do for 2017 to 2025. New technology such as the P2 systems for hybrids already used in VW, Nissan and Hyundai vehicles makes a 20% increase in fuel efficiency possible. Large investments are being made to bring new technology to bear on increasing fuel efficiency significantly. Government agencies are looking at different scenarios by which the new fuel economy standards beyond 2017-2025 could be set between 47 mpg and 62 mpg. An additional factor is the reduction in greenhouse gas emissions- at 47 mpg the reduction would be 3%, at 62 mpg the reduction would be 6%. Another factor is how much the impact is on the cost of vehicles and reduced cost on gasoline. Here there is a wide range in the numbers for average mpg rules at 62 mpg- with EPA estimates at $2800-$3500 increase in vehicle cost and $5000 savings in fuel cost, Centre for Automotive Research estimates at $9790 increase in vehicle cost. The 62 mpg translates into "real world" actual efficiency of 45 mpg. In April 2011, 17 senators put out a letter of support for the 62 mpg proposal. There is a public value involved in this that is also significant- the reduced dependence on foreign oil means savings in defense expenditures in parts of the Middle East, and an economy that is less impacted by volatility in the price of oil. As this aspect of public value or benefits cannot be quantified easily even though they are significant, this may tend to be lost in the debate and the politics of fuel efficiency. For automakers there is significant marketing value in having a visible and strong presence in fuel efficient vehicles because of perception as forward looking- something that hurt Detroit carmakers in the last decade. During periods of gasoline prices at $5 a gallon this provides carmakers with an extra cushion of safety in securing car sales. Carmakers in one country such as the U.S. also have to worry about what carmakers in other countries such as Japan and Germany are doing- if the standards in the U.S. develop a gap compared to other countries developing advanced fuel efficiency technologies this poses significant risks because of the global nature of the automobile marketplace. See the group "Asleep at the Spigot" for more details on this. Many of these less quantifiable factors do not get the attention they deserve because they are significant from experience but not easily quantified. Throw into this the large unknown of what new technologies not yet developed lie ahead with a burst of effort by one country or another, which bring cost reductions at the same time - and the debate requires as much a good sense of what is the path offering the greatest advantages in years ahead than a pure exercize in numbers. ...

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A number of issues came up at the Women20 Summit in Berlin. Annette Niederfranke, Director of the International Labor Organization, brought up the issue of family reconciliation as "one of the toughest challenges for working women worldwide," that in order to meet obligations women tended to work in "non standard forms of employment and in part time work linked to lower wages, lower social security, lower benefits, and fewer training possibilities." Childcare was also an issue that was prominent considering the lack of adequate childcare in many countries including in the European Union. With responsibilities for the elderly, babies, and small children women tend to be in the workforce for shorter periods leading to men taking up many of the higher positions. Angela Merkel pointed out that Gemany tended to take a narrow view of professions available to girls, saying- "So it is very very important that we take a broader view of things while girls are still at school." Merkel also supports a Africa compact that would help women set up small and middle size businesses in poor countries. The "Digital" aspects of this and other efforts for women were a major topic being discussed. One idea that came up was that more cooperation from men was needed to make things happen. This is the third Women20 Summit after ones in Turkey and China, and a sense of momentum was felt by women. ...

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There are differences between the governors of 10 worst hit states and the president of the U.S. on when to reopen the economy. The seven on the East Coast including New York, New Jersey, Connecticut, Massachusetts, and three on the West Coast including California and Washington, all but one have Democrat governors and want to wait beyond May 1, till it is believed to be safe to reopen.190,000 of the 592,000 infected cases and over 10,000 of 25,000 cases of deaths are from New York alone. This is as though a third of the problem is in one state. The feeling in New York is that it should be the last to reopen, other states can go first in the middle of the country. The position in the U.S. Constitution is for states to maintain public order and safety. This was the basis of the president's position to work with the governors and continues to be the case, though there is pressure from economic advisers to the president to reopen earlier balanced by the opinion of health experts around the president.  Some states are taking action to reopen because the virus has not severely affected these states. President Trump says it is for governors to decide what is best for each state in consultation with the federal government. The U.S. government would step in if a state is taking risky action with the coronavirus. On the issue of whether the president could have acted quickly in February following his decision to stop flights from China and set up quarantines in January, the BBC has this to say. Dr. Fauci, the president's respected health expert was one of many public officials who did not see the magnitude of the crisis evolving with lack of good information from China. BBC North America Editor Jon Sopel cites Dr. Fauci's comments on February 13- that the coronavirus danger is "just miniscule" compared with the "real and present danger" of flu. As it happened the president acted alone in his sense of the danger from the outbreak in China through incoming flights and not relying on others. Here is what the situation of each country on reopening is- India -  has extended the lockdown to May 3. France - has extended the lockdown till May 11. U.S. - has extended the lockdown to May 1. States are taking the responsibility. UK - continues lockdown restrictions till May. The French president Macron had a simple answer to the question " when will we be able to get back to a normal, prior life?" Macron said "Quite frankly, humbly, I have no definitive answer to that." Some nurseries and schools will reopen May 11. Not restaurants, hotels, museums and theaters. By May 11 France will be able to test and quarantine anyone with symptoms and general public masks will be available to all. This is what Dr. Fauci in the U.S. also wants to see before being able to reopen, that testing and tracing, isolating, procedures be efficient and reliable. ...

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Kerala state of 35 million people who speak the language Malayalam, is one of the rare places today that has only 4 deaths from coronavirus, 524 cases confirmed and no community transmission. Here the Guardian looks at the reasons why. The Health minister KK Shailaja started very early on January 23, with a meeting of her rapid response team when the virus was still in China.  She setup a control room and instructed Kerala's 14 districts to do this on Jan. 24. When the first case arrived on Jan. 27 on a plane from Wuhan, Kerala had already adopted the WHO  protocol of test, trace, isolate and support. These passengers were checked for temperature, tested and quarantined. With some at a nearby hospital and others in home isolation. This is all the more amazing considering that Kerala is a state in southern India on the west coast that has a large number of people living and working overseas. Many are in the Gulf countries and the arrival of these refugees could have triggered a second outbreak. This was prevented by careful testing, and contact tracing of clusters.  When one group was evasive and concealed information from an airport surveillance team -arriving from Venice, Italy,  in late Feb- a case was detected back to them.  Contact tracers tracked down all of the hundreds whom they had been in contact with and quarantined them.  By 23 March all flights to 4 Kerala airports from overseas were stopped, including Cochin and Trivandrum. On March 25 India went into lockdown.  Some of the achievements in Kerala include quarantining 170,000 people early. with strict surveillance, which is now down to 21,000. Accomodating and feeding 150,000 migrant workers from other states, before returning them on charter trains to their home areas. A big reason for the success is the high literacy rate in the state. A big emphasis on education and healthcare is a part of the Kerala model. Shailaja is a secondary school teacher, and Health minister. From the days since independence of India in 1947 the state has a strong socialist tradition of taking care of the basics- health, education and public services. It also generates a part of its GDP with income from workers who are overseas.  Another reason for the success in dealing with coronavirus is experience. The state had a virus epidemic called Nipah in 2018 which has become the story for a movie called Virus in Malayalam. There is decentralized public health system in the state and people value their health care facilities, understand and trust the health care authorites. There are hospitals at every level of administration and 10 medical colleges. But trust and education, experience tackling the virus before, are key. Kerala is showing that poor countries can deal effectively with the virus, and create a better life by adopting the right model of creating good societies that value education, healthcare services, better economic structures and distribution of wealth, and  a degree of trust and responsibility found in a state that values public spiritedness. ...

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Reports by David Sanger and other reporters from the NYT on the situation in Ukraine as seen from the US, Russian, European, and Ukrainian sides. Russian president Putin sees Ukraine as part of the Russian cultural and economic sphere with deep ties to Ukraine in its history. The western parts of Ukraine near Poland and near the capital Kiev see their future more in relation to other Eastern European countries that have moved closer to or joined the European Union such as Poland and the Baltic republics of Lithuania, Latvia and Estonia. It is not clear even to advisors to the Russian government what Mr. Putin's intentions and plans are. Russia has not yet recognized the two breakaway republics in Eastern Ukraine based in Donestsk.  Some of the key points in Ukraine's recent history- one needs to know this because Ukraine has a difficult history in its relations with Poland/Lithuania and with Russia alternating over centuries, with neither relationship providing the kind of government that would have helped Ukraine's people. Formed only in 1991 the Republic of Ukraine has a long history since 1500 of being part of Poland and Lithuania, and later part of Russia, with some parts of Ukraine under the Austrian Hapsburgs till 1900. Ukraine was part of the Soviet Union in the 1920's to the 1950's in one phase in which it suffered badly with collectivization of agriculture under Communist Soviet leadership and famines. In the second phase of Soviet rule after the 1950's Ukraine made a dramatic recovery as Krushchev assumed control with Leonid Brezhnev who was from Ukraine. After 1964 Brezhnev ran the the Soviet Union till 1984 and this was a good period for Ukraine. The Soviet Union collapsed in 1990 and Russian leader Yeltsin separated Ukraine and Belarus to go their own ways as separate countries from Russia. For 1990-2000 Ukraine did badly losing about 60% of its GDP, a situation also experienced by Russia with economic instability. Russia recovered under Putin, yet Ukraine has struggled since because of mismanagement under different governments and widespread entrenched corruption.  Governments alternated in the period 2000 to 2020 between ones friendly to Russia and friendly to Poland and European Union. This happened in 2004 and again with protests in 2014. The protests in 2014 in Kiev and Lviv led to a government that favored closer ties with EU and NATO. It is this pendulum swing that is Ukraine's and Eastern Europe's experience in the 20th century and it continues into the 21st. What Russia wants is for Ukraine to not be a place for NATO operations, even if it is not allied to Russia after Russian president Putin was disappointed with the Russian allied government's performance under Yanukovich in the 2000-2014 period with corruption and mismanagement. France in the 16th and to 18th century is described by Brendan Simms of Cambridge in his new book on Europe, as needing the external danger for unity, and unity to meet external danger. This could be true also for Russia as the danger posed by NATO helps bring unity to Russia. And this could be a way to unify Russia and provide it with the confidence that it seeks in its effort for parity with the European Union and the US, China in the 21st century.   ...

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President Trump outlines a plan for Afghanistan that increases the U.S. troop presence from about 8500 with an addition of 4000 more troops and advisors, in addition to a counter terrorism force. To war weary public in the U.S. he says: "I share your frustration over a foreign policy that has spent too much time, energy, money- and most importantly, lives- trying to rebuild countries in our own image instead of pursuing our security interests above all other considerations." About his criticism of the war when president Obama was in office as a huge costly waste of resources Trump said: My original instinct was to pull out, and historically I like to follow my instincts... I heard that decisions are much different when you sit behind the desk at the Oval Office." After resisting the advice of his own advisers Trump decided to fire Bannon who had supported use of American private security contractors for the war in Afghanistan, and used parts of the media to question national security advisor McMaster's views on this. Gen. Mattis, completed a strategy review that showed the mistake of creating a vacuum would repeat the situation of Iraq where president Obama withdrew forces in 2011, leading to a sequence of negative events- with Russia, Iran and Islamic State moving into the vacuum, making American intervention in the war necessary, increase in terrorist incidents worldwide, and a flood of refugees into Europe. Ironically clearing the path for an outsider's bid for the White House, with Brexit in which refugee fears and uncontrolled immigration played a part, and the news of terrorism and the war in Syria-Iraq creating a sense of insecurity. A key difference in the Trump approach with Obama's approach is that "conditions on the ground, not arbitrary timetables will guide our actions from now on," in line with Trump's criticism of Obama's approach. The military in the U.S. has long maintained that the best approach would have been to insist on U.S. presence in negotiations with the Iraqi government under the sectarian prime minister Nouri Maliki. Gen. Mattis was head of Central Command under the Obama administration and must have pushed the view of the military to president Obama to no avail. Failure to do so led to the growth of Shiite militias and the alienation of Sunnis in Mosul, leading to the fall of Mosul to Islamic State thus creating the current crisis. Gen. Mattis and Lt. Gen McMaster are intimately aware of the problem and must have convinced Trump that this is what really happened, that a repeat would waste the sacrifices of American soldiers in the twin wars. Trump gave this as his reason when he said in his televised speech to the nation- essentially a criticism of Bush that he expanded the conflict too quickly, and Obama exiting too quickly to create a void. Trump call his policy "principled realism."  The roots of the crisis are in the India-Pakistan conflict. Like the conflict in South East Asia the conflict in South Asia extending from Iran to India and Pakistan, may take a generation to overcome. A rapprochement between India and Pakistan, beginning with trade and economic relations, is not only in America's interest, it also provides the basis for a realistic American withdrawal. ...

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The close alliance between the CDU and the CSU in Bavaria appears to be unraveling. The immigrants at German borders have dwindled down a trickle, about 11,000 immigrants today compared to the wave of immigrants entering Germany in 2015. The CSU's prime minister in Bavaria Mr. Soder and the Federal Interior minister from the CSU Mr. Seehofer, blame the conflict between the two parties on the 2015 decision by Merkel on immigration. The German ARD broadcaster shows 62% of Germans favor stronger action on immigration. The pressure on the CSU comes from the gains by the anti-immigration party AfD in recent national elections. The CSU hopes that by shifting its own position on immigration to a standoff with the CDU and Merkel's position it can hold off the Afd in the elections in Bavaria in October 2018. The pressure on Merkel comes from members in the CDU and from the SPD leadership, which have accomodated some of the criticism of open immigration to reduce the immigrants at German borders, yet now see the need to meet any challenges to Merkel's authority. This is why the head of the SPD, Ms. Nahles called Mr. Soder's push for a confrontation on the immigration issue as acting "like a bonzai Trump." The CDU party leaders in Bavaria call for a "axis of the willing" joining leaders of the governments in Austria and Hungary. and the newly elected government in Italy to impose immediate controls on immigration at the borders. Merkel says she is open to different points of view within the CDU-CSU alliance, but action should be based on keeping the European Union together, and be taken after EU meetings in Brussels. Will this result in a fall of the government? Angela Merkel has adapted to the changing situation on immigration leading to the small trickle in new immigrants at German borders today. Even if the AfD anti immigration party joins the CSU the percentage of the vote for the AfD is mainly in the eastern part of Germany, and CSU in Bavaria, with 12.6% voting AfD in 2017 elections, and about 7% voting CSU mainly in Bavaria. This compares with the Left at 8.9%, Greens at 9.2%, and SPD at 20.5% for a combined 38.6% of the vote that favor Merkel's new coalition policies. This combined with the 25% of the vote gained by Merkel's CSU party gives it about 64% of the vote and about 489 seats in the 709 seat German parliament. A test of Merkel's authority is not likely to be sustained. By making this a pro-European position Merkel has shifted the issue from one of immigration which is now minimal and one on which Merkel has adapted her policies to a stand on Germany as leader with France of the European Union. At this particularly sensitive time when Germany and France are negotiating with the U.S. on trade and Britain on Brexit, German public opinion is likely to consider the impact of new elections and more uncertainty as not good for Germany. With the SPD, Left, Greens and CSU having 64% of the vote, and the anti immigrant parties CSU, AFD about 20% concentrated in the less economically developed eastern part and in Bavaria, the chances that Merkel's position would be weakened or her authority challenged is very unlikely.   ...

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The 3000 delegates at the annual China party Congress and premier Li Keqiang showed support for President Jinping as the Congress makes changes to the constitution. The constitution was amended to include a reference to Mr. Xi's political theory, that the Communist Party would lead the country as it implements socialism with Chinese characteristics, creating a new anti-corruption commission that has party oversight of all public servants. As Mr. Jinping, 64 years,  begins his second five year term, to ensure continuity and stability the clause in the constitution that limits a president to 2 five year terms was removed. Wang Chen is the Congress vice chairman and he led the anti-corruption campaign in China that firmed up popular support for Jinping in China. Wang Chen explained that the term limit changes were designed to bring presidential tenures more in line with Mr. Xi's other positions as Party chief and military commission chairman, positions with more power and no formal term limits.  The process is part of government restructuring that puts the Communist Party more in charge of decision-making.   There was some instability under the administration before Jinping and growing corruption had undermined confidence in the Party, just as China's economy was slowing, with a bubble in real estate, high debt to GDP and need to pursue a soft landing for the economy. The present effort say some delegates including the president of Haier Appliance, is an effort that stable economic policies can be pursued to ensure China's future as its society ages, and the need to complete modernization in parts of the country that have not seen the gains seen in the coastal regions. And that corruption does not undermine the party's credibility to lead this change. The huge economic problems China faces, bigger now from a public interest perspective of pensions, social security in the Chinese context for an aging society, bringing the rapid development of the coastal regions to the interior of the country, housing, the high debt to GDP ratio, and need to ensure good economic growth to provide a stable economic foundation, may have led to a sense that a stable political foundation was needed to ensure this takes place. Political stability was affected during the previous Hu Jintao administration with the Bo Xilai episode when the party unity was affected as "some  party cadres and leaders were giddy and feverish on the waves of the market economy" as Jinping put it at Central Party School in 2013. Mr. Jinping grew up amid such tensions as his father a senior party leader went out of favor first with Mao and then with Deng after the Tiananmen protests. This instability in the country that affected economic progress is part of the experience of older Chinese leaders and affected their perception of events from memories of this period. Some of the media coverage on this topic can be misleading, as it is important not to forget that China suffered for 2 centuries in the nineteenth and the twentieth century -with British invasion in the nineteenth century and Japanese invasion in the twenty first century followed by the chaos of the Cultural Revolution before finally finding a way out of poverty and backwardness in the final decade of the twentieth century and the first two decades of the twenty first century.  ...

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Having an adequate supply of N95 masks is critical for each hospital tackling the coronavirus pandemic. The lack of enough masks leaves health care personnel without the basic protection and is a grave emergency. Hospitals are resorting to reuse of the masks in this crisis and this is not a good practice as it increases the chances of infection. President Trump has invoked the Defense Production Act on April 2 against 3M. This gives the federal government more control over 3M's operations to ensure that it goes all out to make the healthcare N95 masks that the hospitals need in this grave emergency. This report in the WSJ covers the situation as of April 3 on the supply of M95 masks for health workers and others. N95 masks block 95% of very small particles. Supply in the U.S. is for 50 million N95 masks. Demand in the U.S. is for 300 million N95 masks as estimated by the Department of Health and Human Services. in March- this is how many are needed by health care workers to fight this pandemic in the U.S. The principal manufacturer is 3M. 3M company has doubled its production since January 2020. The trend before this pandemic was to send production over to China and other countries. This is changing now with the pandemic and the U.S. policy shifting to be self sufficient in medical supplies in the event of an emergency. A policy Peter Navarro, who heads the agency in charge of getting medical supplies, says President Trump is insisting be implemented. Hospital buyers supported the earlier trend to keep costs down, but this appears to be a costly mistake, putting health care workers in hospitals across the U.S. without the basic protection they need. Minnesota based 3M invented the first modern disposable masks in the 1960's. Interestingly 3M continued to make millions of masks in the U.S. even though competitors moved manufacturing overseas. The 50 million disposable masks 3M made globally went to workers in industries where it provided extra safety from metal shavings or other substances, and medical workers. Now 90% of masks go to medical workers. 3M ramped up production globally since January 11 when the pandemic first hit to 100 million masks a month globally, and 35 million a month in the U.S. at plants in South Dakota and Nebraska. 3M says that it will import 10 million masks from its factory in China, which earlier this year was restricted from shipping it outside China as China needed masks for the pandemic. About 10 million more masks are made by two other manufacturers Alpha Pro and Louis Gerson Co.  U.S. Department of Health and Human Services ordered 600 million N95 masks from 5 companies to distribute to hospitals and build up the national medical supply stockpile. 190 million each of this is from 3M and Honeywell and 130 million Owens & Minor Inc.  3M says it will make 50 million a month in the U.S. by June. Honeywell which had moved production overseas, plans to bring back production to the U.S. by making 10 million masks by May at its Rhode Island and Phoenix plants. There is a company in Singapore that makes one million masks a day in China and other Asian countries, Pasture Pharma Pte, but most of it is committed to government agencies in China.   ...

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The Times correspondent in Beijing says he sees two Chinas one that is showing technological advancement in 5G, in space technologies, in information technologies, infrastructure building in big cities. The other China is in rural areas away from the big cities, in smaller towns in regions away from Beijing and Shanghai. These areas have suffered neglect and have changed little over decades, with the focus during industrialization on larger cities and the coastal areas. This is evident in the manner health services infrastructure and development of medical personnel and doctors were neglected in the rush towards building manufacturing and infrastructure of road and rail. There is a shortage of doctors and hospitals, health services are costly, and waiting lists for beds at hospitals is huge. Doctors are also not held in high esteem because the focus is on profit in the market economy that has taken over the health sector.  Education of citizenry on respecting the common welfare which is expected and normal in Europe and America has also suffered during the rush to industrialization. Efforts to ban and eliminate use of certain wild animal foods not being respected by fellow citizens can be seen in this context. This caused the SARS virus epidemic and the epidemic today from the coronavirus. Seen from this angle a slowdown in construction, infrastructure building, and a slowdown in the economy, can even be healthy, so that focus can be shifted to better health, better sanitation, and better medical infrastructure including medical human resource capabilities. Investment in public education on health and self enforcement of rules by citizenry for a better society is indispensable for progress. It is in these conditions that the challenge of the national and international emergency of the coronavirus can be seen today. It also provides an opportunity to reflect on progress so far and the needs of the future. These challenges are even tougher than repeating what one has done before such as building more and more infrastructure, as they involve building a better society through public discipline along with investment in health and education services. This provides a lesson for many Asian, Latin American and African countries in the rush to industrialization. Turning over the health sector to a market economy making services costly and distributed unevenly in the population has not worked in the U.S. for the betterment of all citizens and a healthy society. Carrying this over from U.S. to China and not learning from Europe in what Europe has done well in the less costly and broad distribution of health services for the people, is one of the poorer lessons learned. This is also true for India and South Asia, South East Asian countries in their rush towards industrialization.  ...

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William Burns, a former Deputy Secretary of State, and a former ambassador to Russia 2005-2008, looks at the U.S. and European Union relationship with Russia following the expulsion of Russian spies in 2018. He says the U.S. and the European Union should take strong action, yet hopes this is a passing phase so that a healthier relationship can be built with Russia in the long run through diplomatic channels. Expressing views expressed by former president Obama and other experts, Burns says Russia lacks the alliances and broader support that the U.S. and European Union have, and is much smaller than the larger economies of the Western alliance. Under Putin a strong interventionist position has made Russia look better at home but may not be the best for Russia in the long run, says Burns.   Burns calls for stronger sanctions on the economic elite and business leaders under president Putin. Yet the sanctions have not deterred president Putin and a long run solution needs to be found, including issues such as Ukraine and issues that affect the Russian economy so that the change in relations since 2014 can be reversed. After the Berlin Wall collapsed hopes for integration of the Russian economy into the West were raised yet were not realized for Russia in the years following the Yeltsin government and the Russian economy suffered, first during that period and then during emerging market crises. Russian disillusionment with the West was followed by a more inward looking economy under Putin to help stabilize the Russian economy, accepting devaluation of the ruble to make the Russian economy more competitive in a period of low oil prices. Foreign investment collapsed following the Ukraine crisis but the Russian economy adapted to the shock from oil prices. This was followed by efforts to preserve these gains with an interventionist policy that made the Putin administration look better at home and win popular support with strong action in Crimea and Ukraine. This interventionist policy has played out too far with the meddling in U.S. and European elections creating a backlash that is now taking place. With the European Union, having a traditional policy of restraint and good relations with Russia, openly questioning Russian policy under Putin. Much of that period when Russia responded first to the collapse of the Berlin Wall with the collapse of the Russian economy, and in the following decade facing emerging market crises and collapse of foreign investment -which created a more inward looking Russia under Putin in his third term- is shown in Lyrarc.com. In some ways the Russian response in Ukraine, the effort to bolster popular support at home in elections, and the interventionist approach are linked to the efforts to find a Russian response to the economic crises Russia faced since the fall of the Berlin Wall. Seen in this way a shift to better relations is still possible as a broader perspective is gained.  ...

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The Public-Private Investment Program of the U.S. Treasury Department has not had a good start. With most banks passing the U.S.government's stress tests and raising $50 billion in the markets, PPIP which was intended to to help resolve the situation of all the toxic securites siting on the bank's books, has gone the way of all the prior efforts to solve this problem. Simply postponed this time hoping that the housing market recovers. With the Rogoff-Reinhardt study showing that it takes about 6 years or longer before housing recovers from such aserious crisis as this one, it would be 2012, before one sees an improvement. See the link to the Business Week analysis that shows housing markets in the USA having some aspect of normalcy in 2012. Yet even this analysis is using an optimistic scenario, because it assumes Moodys Economy.com estimates of economic growth for GDP of 4-5% in 2011- 2012. This assumes the consumer debt that has reached over 100% of GDP will be reversed quickly in 2010, and the the factory capacity utilization currently at 68% and expected to drop further in 2009- with more automobile manufacturing capacity remaining to be scrapped -will recover quickly in 2010-2011. This is unrealistic considering the combination of factors at work. Here Devin Leonard talks to PIMCO chief Bill Gross, who with Warren Buffett and PIMCO CEO Mohammed El-Erian, are key proponents of the PPIP program. Both El-Erian and Warren Buffett say they conceived independently of such a program, in which toxic securties are taken off bank's books with government help. As PIMCO is one of the largest traders of mortgage bonds in the country and has years of successful experience in dealing with mortgage bonds, the New York Fed under Geithner turned to PIMCO for advice in 2008. By this time PIMCO was under ownership of Allianz, a German insurer, which bought PIMCO for $3.3 billion in 2000, with $233 million and a $40 million retention bonus going to Bill Gross. Bill Gross describes how the program would function. PIMCO puts up $500 million, and Treasury matches this with $500 million. Analysts estimate that this partnership would be able to attract as much as $ 4 billion in low interest financing from Treasury and the Fed. Gross says that some of these securities pay as much as 14% interest, and even with a 70% default rate, this partnership could make $250 million a year on the $5 billion partnership, or a 5% return, with PIMCO making a 25% return on its original investment. This isn't exactly pro bono work as Buffett had originally suggested to Bill Gross in the midst of the crisis. But a more fundamental concern is that no one really knows exactly how much of toxic securties the banks have on their books, even though estimates have been made. If this is closer to $1 trillion, PIMCO's expertise and efforts will simply fall short of dealing with a problem of this size, and the window dressing of a problem of this magnitude could only hurt efforts for the eventual resolution of this problem. If housing does not recover as is expected till 2012 at the earliest, and the economy continues to deteriorate in unemployment and factory utilization, then the toxic securities on the bank's balance sheets may pose a bigger problem that will require serious action....