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Government GDP figures show the GDP shrank by 1.8% in the third quarter of 2016 compared to the same period in 2015, the first such contraction in the economy since 2009. Household consumption was down 3.2%. The sharp decline in the value of the lira by 20% in 2016 makes imports costlier, in an economy dependent on consumption spending and tourism for higher GDP growth. Political uncertainty with instability in Turkey following a crackdown on opposition and media also leads to decline in foreign investment and investment by domestic firms.

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The western pharmaceutical companies see the potential for a big increase in sales in developing countries with better pricing to reach a larger number of people. Earlier this year Glaxo said it planned to reduce prices to two thirds of the levels in western countries, and charge 25% of prices in western nations to people in the 50 poorest countries. As a result Glaxo now forecasts a 10% increase in sales in 2010 in the Asia-Pacific area, after a 9% increase in 2009. The overall impact on public health will however be limited as even with this price reduction these medicines will benefit a fraction of the people. Today the combined pharmaceutical sales in Asia, Africa and Australia are $90.8 billon. According to IMS seventeen economies including China, India, Russia and Brazil will see pharma spending grow by $90 billion in a five year period 2009-2014. Of this China's demand will grow by $40 billion in this IMS Report on "phamemerging" economies. The upshot: phamemerging will account for 20% of global sales by 2013, up from 16% in 2008....

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Indian companies and the speed and effective ways they do research offers a new model for western pharmaceutical companies and many of them are collaborating and setting up partnerships to discover and benefit from new drugs.

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As India's growth rate improves, one weak area is agriculture which is growing at about 3% a year, and contributes only 13.7% to GDP. Of huge significance is that about 600 million people depend on agriculture. Lagging development in this area leaves the nation backward as a whole. Farming practices are still backward and have not changed significantly. Agricultural markets, infrastructure, is still backward and needs improvement. Decline in the size of plots since 1970 from about 6 acres to about 3 acres today, and low productivity on farms is a problem. Farmers fear being pushed off the land and politicians look to the rural vote to preserve the status quo. Poor monsoon rains can increase problems for farmers as three fifths of farmland is still without irrigation. Agricultural markets are fragmented, so that apples from Himachal Pradesh in the north are not easily shipped to Karnataka in the south, and coconuts in the south not easily shipped to the north. State marketing boards in India called Agricultural Produce Marketing Committees (APMC's) control trade in fruit and vegetables. There are about 3000 fragmented agricultural markets in India, and markets can be fragmented within states. Laws from the 1950's to prevent hoarding are still on the books reducing incentives to invest in cold storage and warehouses, a significant problem in India leading to much waste and rotting of agricultural products. This hurts farmers because it leads to cuts in price. The distribution chain also hurts farmers with middlemen and commissioning agents taking as much as 6% in commission compared to the international level of about 0.5%. This review of the state of agriculture by the Economist says that 25 years after the first reforms opening up India's economy in 1990, agriculture as one area which touches the life of about half the population has not seen much change....

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The Bharatiya Janta Party wins state elections in Madhya Pradesh and Rajasthan, two large states in the north and central part of the country. The Aadmi Common Man party does well in New Delhi elections. The Congress party sees a large loss of seats in all three major election states. The ruling national Congress party sees its support erode as a result of corruption and mismanagement of the economy, and younger voters dissatisfied with the party.

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Don't let the current holiday season retail sales fool you as they have held up reasonably well. The impact of the mortgage and housing crisis will be felt in a delayed manner. It won't be till 2008 that the impact will really be felt. And the impact is expected to be lasting and deep, could take the rest of 2008, 2009 and into 2010 for this protracted tightening of credit. About $300-400 billion contraction in credit is expected when banks tighten their credit lending because of losses they are taking in the mortgage crisis. This will happen in an environment of falling house prices and consumers will not have access to the $340 billion in cash from home and mortgage equity financing that they took out in 2006, estimate of the Bureau of Economic Analysis. Auto, retail, apparel, and luxury items would be hit the most. On the jobs side not all the jobs will be lost in the USA. The USA imports about $740 billion in consumer goods and autos each year, which is one third of consumer spending excluding food and energy. The lower consumption in auto and apparel would affect exporters in Japan and China and South Korea. But Chinese exports have reached a point that they are causing trade tensions and a call for strengthening the yuan. An increase in American exports and lower imports could help bring down America's trade deficit. This could give China an opportunity to build its domestic market and markets in Asia and Europe so that it is not so dependent on the US market. For the US where the savings rate is near zero this is an opportunity for consumers to build their savings and reduce debt. Europe and India and the Middle East are expected to continue growth and China may see slower but continued growth in 2008 and 2009. In the US industries like aircraft and infrastructure promoting companies that sell to countries like Russia, India Brazil, the Middle East, and China will continue to grow. And because rates are still low large nonfinancial companies still have access to funds for expansion and capital investment. In a global economy the US consumer may be one part of a much larger picture. ...

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The inability to convince farmers to trade land for a fair settlement in money, new homes, schools and other benefits and to make this a win-win proposiion between farmers and companies is holding up abut $98 billion in investments in steel plants and other plants. A bill in Parliament would require companies to negotiate directly with farmers and reach a settlement that is good for farmers to resolve what is increasingly a serious problem. It is holding up an industrial revolution and the creation of manufacturing industry in India to provide the kinds of jobs that are needed badly.

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As president Jinping begins a second five year term his focus is on the small communities like Chashan, only a 6 hour drive from Beijing, that were neglected in the rush to industrialization. He has vowed to get rid of poverty in China by 2020. About 43 million people live in rural communities that have mostly older people and live on 95 cents a day. There is another challenge say experts which is the much larger popuation that lives in rural and urban areas- including urban migrants without property and residence rights- who live on less than $5.50 per day, $165 a month, according to the World Bank. This is about 1070 yuan per month, or in Indian rupees for a comparison with India- which was at a similar stage of development in 1990- of Rs 10,000 per month. About 40% of China's population or 560 million people are in this group. With a rapidly aging society as a result of the earlier one child policy, China faces the risk of not advancing from the level of a middle income country, in the way that South Korea and Japan have moved to levels similar to Western Europe and the U.S. As China's growth level slows and with an aging society this remains a major challenge. As this report shows there is great pressure on local officials to eliminate the poverty level of people living below $30 or about 200 yuan a month, as targets are set at local levels and corruption weakens the effort. There is concern at the lack of an effort to improve the living conditions of the 200 million rural migrants living in cities, who under China's "hukou" system are not considered residents and are not getting education and health benefits. ...

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The head of the World trade Organization Okonjo-Iweala and the prime minister of Bahamas Mia Mottley say that overconcentration of manufacturing in China creates fewer opportunities for growth for poor countries. The supply chain needs to be redesigned after the pandemic not just because it creates a more dependable supply chain for the US and the European Union. It also  needs to be resdesigned to increase manufacturing in countries such as India and Mexico because this will create more opportunities for growth in other countries. For this to happen the infrastructure has to be made similar to that in China. This program of rapidly building the latest infrastructure and logistics with next generation technologies is underway in India with the Modi administration building new pools of capital, skilled labor, land and logistical infrastructure for the purpose of  rapid export led growth. A target of 2 trillion dollars in exports by 2030 has been set by India. This will affect a broad region from Indonesia to Vietnam in Asia and Mexico, Brazil in Latin America, bringing the benefits of trade to a wider region for the first time and making allies of the US and the European Union true partners in trade and manufacturing for the supply chain. ...

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With the introduction of the iPhone 4S, Apple announced the iPhone 3GS will be offered free, and the iPhone 4 for $99. This puts Apple iPhones priced to compete with smartphones in the middle and lower price ranges in the market. The free iPhone is a model first introduced in 2009. As the expansion of the smartphone market is now ocurring at the low and mid price ranges, companies making smartphones using Google's Android software and Blackberry's RIM are targeting this market. In the U.S., as of the end of July 2011, 82 million Americans owned smartphones, increasing 10% from the prior quarter, according to comScore. 42% of U.S. smartphone users use Android phones, only 27% use Apple phones, as of the end of July 2011, because of the price difference. In India Apple iPhones have barely made a dent because of large price differences. Rapid growth expected in emerging markets will also make this low end of the smartphone market attractive for Apple.

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The changes at Sony Pictures outlined in an interview with CEO, Michael Lynton. Sony Pictures will look for savings of $350 million. Motion Pictures showed declining revenues and revenue from TV shows increased in 2013. Sony Pictures will expand its TV shows business. Part of the expansion will be through buying and starting up new television channels in the growing markets of India and Brazil. In this interview Lynton points to the risks in seeing franchises in big budget movies before they become franchises and before the first movie in the series is successful. Smaller budget movies such as "The Conjuring," "We're the Millers," have been profitable for Sony Pictures, so he sees the tendency to focus on franchises alone as risky. Sony pioneered in producing for cable but did not see this as being a large revenue generator five years earlier. What changed Lynton says, is the increase in subscription video-on-demand services and growth in Netflix reaching new buyers.

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About 500 million smartphones are expected to be sold in China in 2015, according to IDC. Xiaomi has gained a firm foothold in China among young people and a fan base similiar to the way Apple is seen in the U.S. The next phase of growth is in countries where there is still room to grow with a large number of people without smartphones. Founder Lin Bin is a former Google executive. He has hired another Google employee Hugo Barra to plan the next stage of expansion overseas. He says Xiaomi will continue to focus on areas other than Europe and the U.S. where there are weak telecom carriers. Xiaomi's pricing model is based on selling quality smartphones with many features at lower prices. In the U.S. and Europe where large service providers offer large subsidies to users of smartphones Xiaomi cannot compete because its pricing advantage disappears. This means taking on the market in places such as India, Indonesia and Brazil where there are many people looking for a smartphone at a smaller price. One obstacle is that Xiaomi has few patents, and competitors are likely to mount paten challenges in these markets. In India, the second largest market, Ericsson has mounted a patent challenge leading to a court order suspending sale of Xiaomi phones. Xiaomi's strengths in China lie in savvy use of the internet and media to market its phones, using some of the methods used by Apple. ...

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Seen in a larger context, the Biden tax pledge seen from the southern and midwestern and less well off states is not about taxes, it is about federal revenues that build the infrastructure and services in these states that increase the standard of living. This happened in the 1930's and 1940's under FDR and Truman, in the 1950's under Eisenhower, in the 1960's under Kennedy/LBJ. And is happening again under Biden today. Lets not forget that president John F. Kennedy says in his speeches that these regions in America in the 1860's under Lincoln were in development close to what prevailed in the 1960's in India, Ceylon, Chile, Turkey or China. The Biden pledge not to increase taxes on anyone making less than $400,000 is significant because it grasps the situation in America where extraordinary gains in wealth since 1980 have gone only some of it to the top 1-2% in midwestern states and southern states, and most of it to the top 3-5% in coastal states population in the east and west, New York and California, where the finance and tech industry are based. In Michigan and Wisconsin only 2% of households make more than $400,000, in Pennsylvania, Nevada, Arizona and Florida 3%. WSJ shows a map of the US showing this for individual states. The core southern states have 2% of households with incomes over $400,000- including Arkansas, Tennessee, South Carolina, Alabama, Louisiana, Oklahoma, with Mississippi less than 1%. It is only segregation in the late 1960's and culture issues such as abortion that have turned them from Democratic states to Republican states as they were the largest beneficiaries of taxes diverted into investment in these places since FDR/Truman and John Kennedy/LBJ. It was JFK who came up with the phrase "a rising tide lifts all boats" when he opened federally funded projects in Arkansas. Seen objectively the large investments made under Lincoln, FDR/Truman, Kennedy/LBJ from tax revenues are what changed this region from conditions that prevailed in less developed countries that John Kennedy points out in his speeches, true for the midwest, parts of the west, and the southern states alike.  President Kennedy said on Feb. 25, 1963 to the American Bankers Association Symposium on Economic Growth: "Today, many Americans tend to think of developing underdeveloped countries in terms only of faraway nations. But in 1863, even measured by 1963 dollars, our own per capita income--and this should be a source of encouragement to many who are laboring with the problem of underdevelopment in far-off countries--our own per capita income was less than $1 a day, approximately the same as Chile's. Nearly 60 percent of our labor force was engaged in agriculture, the same percentage as is today engaged in the Philippines. An estimated 20 percent of our population was illiterate, the same percentage of the population of Ceylon. Only one-fifth of our 34 million people lived in towns or cities of over 5,000 in population, as is roughly true now of Turkey. In 1863, this Nation had fewer railroad tracks laid than India has today, and its children had a shorter life expectancy than a child born this year in Thailand or Zanzibar."   ...

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The heavy monsoon rains this year and the lack of adequate storage facilities may result in the loss of 10-15% of the wheat and rice harvest this year, according to Indian government sources. This means food prices are rising because of this loss of grain. India badly needs more and better warehouses to store grain and control food prices.

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Friedman describes the development of a tablet computer by a team led by Prof. Kalra and two professors of electrical engineering at the Indian Institute of Technology, Jodhpur, which costs less than $50 to produce. The new price point is needed to reach over 200 millon students in India who need such a device to escape poverty and poor teaching. The new tablet computer enables them to reach out to knowledge in language, sciences and math, and the humanities in the world outside them. This is an I-Pad like, internet enabled, wirlessly connected tablet. The average Indian family in rural areas saves $2.50 a month, and government support for its educational benefit could subsidize a portion of the cost. The tablet would bring distance learning, teach English, to students and help track commodity prices for farmers. The invented device uses the Android 2.2 operating system, a 7 inch touch screen, 3 hours battery life, and can download YouTube videos, PDFs and educational software. The governmment is expected to subsidize wireless connections to students. The name of the tablet is Aakash, Hindi for sky....

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The Economist points to dynastic politics in India and the weak leadership of prime minister Manmohan Singh, who owes his position to Sonia and Rahul Gandhi of the Congress party. There is a vacuum in the leadership resulting in no clear policy and definite actions on tackling corruption issues. This has created a crisis of confidence for the Indian public, especially for young people who have lost faith in the government to bring much needed change. Technology with mobile phones, computers, television and mass media, increasing use of cars and motorbikes and rapid road/rail links are rapidly changing Indian society. The Indian public is looking for changes in governance to keep up with these rapid changes and greater publc awareness of the world around them.