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Mexico's new president, Enrique Nieto, and questions about the old PRI and the new PRI.

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Sri Lankan High Commissioner Milinda Moragoda, is interviewed in Indian Express in Idea Exchange, with Shubhajit Roy, moderating the questions. Moragoda explains what happened over the last three decades and how Sri Lanka got to this point. About politicians he says Sri Lanka has too many politicians, and the violence of the JVP in the south and LTTE in the north and northeast set the country back by decades. Leaders from J Jayawardene, Kumaratunga to the Rajapaksas all failed to understand the spiral downwards of the economy, says Moragoda. Debt increased and 80% of the government revenues goes to pay pensions and government employees, leaving only 20% for debt service and little for investment in the economy. He says there are 1.5 million government employees and 500,000 pensioners, for a country of 22 million people. Of the population of 22 million about one million Tamils left the country during the civil war, and another 1 million people are in West Asia. Moragoda says most of the borrowing came after 2009 as the civil war ended with $12.5 billion borrowed or 40% of the total debt. About 80% of government revenues goes to pay pensions and government employees and another 70% goes to pay interest on debt, but he does not elaborate or explain this. What one can say from the experience of other countries in debt spiral is that at some point the interest accumulates to create a vicious cycle of interest on the cumulative total which includes interest from earlier years. Argentina is a recent example. And he makes no effort to say how he sees Sri Lanka is finding a path out this situation with a $2.9 billion IMF loan on debt of $51 billion.  Of the $12.5 billion borrowed since 2009 Moragoda says "that's  40% of our debt." Yet the total debt on which Sri Lanka defaulted is shown at $51 billion. $12.5 billion is 25% of the $51 billion. He does not provide any details about the financing terms on which Sri Lanka borrowed. It is clear that the interest rates were high over 6% in many cases which can be very burdensome for poor countries dependent on commodity exports. Countries such as Greece with debt crises had very large numbers of pensioners and government employees in Europe during the eurozone crisis, but nowhere does it show that it took up 80% of the government revenues in Greece. The number of government employees range from 1 to 1.2 to 1.5 million according to different figures for Sri Lanka. Even in Greece the number of public sector workers in government were 616,000 by some estimates during the severe eurozone debt crisis years around 2015. They are now estimated at about 369,000 in 2020.  Without a clear idea of these figures and transparency it is hard for any economy to be managed in a prudent way. See the related report "Fallacies of Sri Lankan Debt Patterns," a report by the Observer Research Foundation, on this same page today which say that Sri Lanka borrowed at exorbitant interest rates for a poor country.  Moragoda has worked for administrations in different portfolios including in economic affairs. He says Sri Lanka's economy is too small to get attention and investment it needs from India, and that the Adani investment shows that this can still be made to happen. India remains Sri Lanka's key partner as it grapples with this crisis. ...

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PM Modi says in Mann Ki Baat monthly radio program that Unified Payments Interface UPI has recorded 3.5 billion digital transactions in the month of August. Digital payments of 2 trillion rupees is happening using UPI on average. In this way it is transforming India. "Through this the economy of the country is acquiring cleanliness and transparency, and we all kn ow that the importance of fin-tech is increasing a lot," said Modi

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The National Action Party (PAN) wins elections for governor in 3 states, including Veracruz. Voter dissatisfaction with the ruling PRI party and the administration of president Pena Nieto is putting the PAN in a better position to contest the presidential elections in 2018. The administration of Pena Nieto came in with high expectations but has suffered with low growth, and the investigation into the murder of 43 college students in Guerrero state which showed lack of rule of law in Mexico. Governance, corruption and the rule of law are major issues today in Mexico, and this favors the PAN in contrast to the PRI. The poor performance of some governors was also an issue in the elections.

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This NYT's look at PDVSA the Venezuelan oil industry 2026 and in the years 2013-2026 after Chavez is an eye opener on what happens when socialist ideas of distribution and equality fall apart. There are dangers on both sides the Right, the Left makes no difference mere labels, vigilance, good leadership, clean governance, good management hard work, are essential for countries and peoples to prosper.The operations of the Venezuelan oil industry in these years as shown in the NYT. show the failures of the Chavez ideas for the economy, hyper inflation and mismanagement of the country's oil resources that followed in 2013-2026. From Nigeria, to India in the years just before the 2014 elections, to West Bengal, India in 2026, many such lessons in Indian states post Independence 1947, Sri Lanka, clear lessons on how socialist regimes take a turn into financial disaster as dreams evaporate and economies are destroyed with lack of jobs and industry, mismanagement and corruption. Everything falls apart, billions of dollars of public funds are lost, economies are ruined, people's lives destroyed, a cautionary tale for future generations. In Latin America, Asia and Africa most prone to such disasters, where bad leaders can come to power through elections if the situations are allowed to be created where this can happen through the lack of effort to build better societies that work. ...

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Argentina has faced repeated bouts of very high inflation. In this episode it joins countries such as Turkey, Sri Lanka, Ghana and others.

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Pope Francis plans a visit to the Philippines and Sri Lanka in Jan. 2015 This is an effort to support the Catholic Church in countries experiencing rapid population growth and change. The Philippines has 75 million Catholics, about the same number as in the U.S., and compared to 46 million in Italy. Mexico has 96 million Catholics, and Brazil 126 million Catholics, Sri Lanka 1 million, according to the Pew Research Center figures for 2010.

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Sri Lankan president Ranil Wickremasinghe says he is keeping an eye on the debt write down agreement for Zambia that restructured debt of $20 billion with G-20 nation assistance. The IMF loan agreement should be done by August he says. Then comes $3 billion of assistance sought for imports of food and fertilizer. It will take a few months for Sri Lankans to see relief but he sees the light at the end of the tunnel.

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Ranil Wickremesinghe of Sri Lanka, both Finance Minister and Prime Minister during this economic crisis, says to The HIndu in this interview- "It's hectic, this is a new experience. I am working eight days a week." He says he will firm up the staff level agreement with the IMF by June. Then he says comes the debt restructuring plan that gives a clear indication of what Sri Lanka has to do. By July there will be also the interim Budget.  He said "I must say that Indian assistance has helped us get through these difficult times." He says in addition to the $3.5 billion he is hoping to get another $500 million assistance for fuel. On austerity path Sri Lanka faces he says we have agreed with the IMF that vulnerable groups will have to be supported. He said if we look at what are called tough conditions, even if the IMF were not there, we would have to do it. The advantage of going with the IMF, you get something or everything. If you were to do it on your own you get nothing. On austerity he said yes there has to be austerity but we want it to be for the short term, so that even if 2023 will be a difficult year, in 2024 we can start moving. On the Adani investment of $500 million and Mr. Modi, he says  that he emphatically welcomes it. We need it at this moment and it is a good sign that investors are coming in, said Wickremesinghe. Look he said if anyone else in India wants to invest another $500 million I am not objecting. He said Sri Lanka needs to use its potential for wind energy which is big. ...

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Enrique Pena Nieto, assumes office as the new president of Mexico in Nov. 2012. His focus is on implementing a 13 point agenda which includes crime prevention, better schooling and employment opportunties, new train lines, expanding internet access, and support for social programs for the poor. He said there were two Mexico's - one that was benefitting from the global economy and modernization, and the other which was falling behind and hurting Mexico's image abroad. Economist Videgaray, close advisor to Nieto, is now the new Finance Minister. Videgaray says there is a common misconception that the PRI which ruled Mexico for so long is back in power. But times have changed. The PRI of today is no longer the PRI of yesterday, and understands that it like any other party can be voted out of power if it does not provide good government, says Videgaray. The focus of the new government will be on efficiency and modernization. Doing this will require the cooperation of the opposition parties, as Nieto won only 38% of the vote in a three way election against Mota and Obrador. He does not control Congress and the PRI opposed the legislation of the Calderon government during its term in office....

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Peter Navarro who has advised the DJT administration on world trade says even when there is no war the perceived risk from the narrow straits at Hormuz and the threats posed by militant groups financed by Iran had led to a premium being baked into oil prices. Navarro says on the Iran Premium (perceived threat risk premium) thatis is about $15 in oil prices. That it reduces growth in global output by 0.4% or $10 trillion over 25 years or $4 trillion over 10 years. As this perceived risk comes down oil prices will come down even further - even into the $50-$60 per barrel range, says Navarro. He cites different economic studies that show even in normal times the ballistic missiles and militant threats posed add up to $15 premium in oil prices to reflect this risk. What this means is higher oil prices and lower growth across the world- in poorer countries and in the US and Europe as a result of this. The current war he says gives the opportunity to reduce or remove this premium paid for perceived risk. The loss in global output he cites is about $450 billion a year adding upto $4 trillion in a decade and over 25 years about $10 trillion. Confronting the threat is not just a matter of national security, it also means this drag on growth on poor and better off countries from Sri Lanka, Nepal, India, Bangladesh, Pakistan to UK, Spain, Germany, and Italy, countries that can be so much better off with much of that $10 trillion tax or burden on world economies removed. ...

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West Bengal elections in April-May 2026- the elections come after Sri Lanka, Bangladesh, and Nepal, nearby countries, all changed governments following protests about corrupt governance, mismanangement of the economy. Inside India there is a profound change that is not even covered in the  established media such as the BBC and DW.com. The states of Orissa, Andhra Pradesh, and Bihar, in the northeastern part of India had landslides in voting for the ruling BJP party and NDA alliance for Clean government and Modernization of the economy. A similar vote took place also with a landslide for Clean Governance and Modernization in the state of Maharashtra in the western part of India with the commercial hub of Mumbai (Bombay). In the southern part of India in Kerala, the capital city local government in Thiruvananthapuram has also shifted to this Clean Governance and Modernization under the BJP government that governs at the federal level in New Delhi. India is like China and Japan before it, going through massive change to modernize the country with new infrastructure building and rapid development including investments in hospitals, universities and airports, trade logistics, factories for industrial production. The magnitude of the change is reflected inthe population of most of these states being close to 100 million in each state West Bengal(105 million), Maharashtra(130 million), Bihar (133 million), almost the whole population of the US in just 3 of the many states- witnessing huge changes that could mean 20-25% growth rate a year n the next couple of years to 2030 doubling their GDP. ...

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This graphic shows the increase of interest rates by central banks around the world to cope with inflation and risks to the economy. Sri Lanka, Ukraine, Russia, Egypt, Argentina have large increase in rates. The US increased rates by 0.75% this week.

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A tri-service briefing for the India Armed Forces explains how the Agnipath scheme was developed to clear any doubts about the military recruitment scheme. It shows why the scheme was developed and the need for armed services to reflect the youthful population of India.

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The WSJ's Juan Montes, in an exceptional report from Mexico City, tells the story behind a landmark achievement for Mexico- Pacto Por Mexico of Dec. 2, 2012. The major political parties of the right, centre and left forge an agreement for the way forward for Mexico- beyond monopolistic pricing and industry structures in Mexico that hurt consumers, to increase foreign investment and new technlogies to modernize the national oil company Pemex operations, change labor laws, and create a climate for higher growth. The pact is broad ranging, shows a grasp of the problems facing modern Mexico, and ranges from anti-monopoly laws to getting junk food out of schools considering Mexico's high obesity and diabetes rate. It covers 95 goals. It is hard to overstate the significance of this achievement for modern Mexico. Montes describes the initiative of the PRD leader Zambrones in rebranding his PRD party as a moderate left wing party open to new ideas. This happened after the departure of Lopez Obrador from the PRD to form his own party in September. Zambrano and PRD moderates brought up the idea based on what happened in a landmark deal in Spain in 1977, that helped transform Spain after decades of stagnation under the Franco dictatorship. Around July after the presidential election, PRD president Zambrano, and the PRD's Jesus Ortega, held meetings in Mexico City with Jose Murat, a senior PRI politician, and PRI president elect Nieto's top advisor, economist Luis Videgaray. The decision was made by president Nieto and economist Luis Videgaray to pursue the discussions for joint agreement on vital issues facing Mexico. The PAN party was brought into the discussions. By mid-September nine people from the PRD, PRI and PAN started work on a draft agreement at Murat's home. The ground rules were set for discussions to be private, to have agreement on all points or assume nothing had been agreed, and not let current events disturb the talks. The nine participants set up the broad principles, and then a group of three, one from each party was given the task of coming up with the right language for the pact. By the end of November a 34 page draft was put together. A night of intense work to 2 a.m. followed the inauguaration of president Nieto on Dec. 1, with the Pact ready for announcement on Dec. 2, 2012. The Pact is a landmark achievement in its potential for changing Mexico and creating decades of economic progress similiar to that envisioned by the Spanish parties for Spain in 1977. ...

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Rajeev Suri heads the business made up of the Siemens Nokia Network. This is the remaining part of Nokia after the sale of the hand set business to Microsoft. Siemens exited the Siemens Nokia Network and this is now managed under Nokia in Finland.

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In addition to a new $1 billion credit line after the earlier $1 billion credit line, India is facilitating Sri Lanka's negotiations with the International Monetary Fund. Indian focus is for stronger Neighborhood and economic development in the region at an accelerated pace after earlier setbacks in the region. This can be seen in Uttar Pradesh a region as large in population as the US, which faltered for 60 years after independence, but is moving forward with both state and federal government guided efforts. This also holds true for the entire Indian Ocean region countries where Indian experience in achieving development goals can be shared. 

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Pakistan's foreign exchange reserves dropped to $2.9 billion in February 2023, says this report in the WSJ, enough to cover 2 weeks of imports and a fraction of debt servicing requirements. Under an IMF agreement that is being negotiated $1.1 billion will be given by the IMF, which would lead to further lending by other countries and banks based on IMF oversight. This includes putting $630 million in  additional taxes and increasing the price of electricity. Successive governments have decided to avoid the IMF conditions of increasing taxes and price of electricity. Donor countries such as Saudis and Qatar, UAE, would step in once IMF oversight is in place and invest in airports, power plants, oil and gas companies, and make loans to Pakistan once the IMF oversight is in place, says WSJ.   Sri Lanka faced a similar situation after it delayed an IMF program and loan, leading to financial crisis. The situation is now stabilized with the IMF on the verge of making a $2.9 billion loan and other banks making loans on the basis of IMF oversight. In Sri Lanka's case India is a serious donor, investor and supporter of Sri Lankan recovery. ...