LyrArc Article Gist
Companies have to work hard to retainthe best young people and the best employees as good talent is scarce in India.

LyrArc Article Gist
India's central bank chief, Rajan, favors a lower inflation target of 4%, with fluctuations of 2% up or down. Lower inflation is critical for India to achieve higher growth rates. The World Bank lowered the rate of growth in the global economy but kept the rate of growth of 6.4% for India unchanged. Rajan also favors creating a more formal system for setting rates, with a committee like the Open Market Committee in the U.S. deliberating over the different factors for such a decision. Rajan was a professor at the University of Chicago, and chief economist at the IMF, before joining the central bank. Central bank policies have helped stabilize India's currency, the rupee. The lower cost of oil for India with an oil import bill of $100 billion is a big boost for economic growth. For the global economy this comes at a time when China's growth rate is slowing to below 7%.

LyrArc Article Gist
Ford making plans to put 2 plants one in Nanjing, China, and one in Thailand with about $1 billion investment combined suggests Ford is looking at GM's strategy and planning for a new era in automobile production, one that makes more cars in high growth regions of Asia. The demand is expected to grow largest in India, China and the rest of Asia. And these cars will have to cost a lot less than they are today for the lower purchasing power of Asia's new middle clases and lower middle classes which are growing in numbers. Meantime the costs in the US are still high even after reducing the health care burden through the health care trust that GM negotiated with the UAW. The UAW agreement with GM reduces labor costs for new workers but existing workers costs continue to be at the levels from before. And non assembly new workers not all new workers get paid at lower rates than the existing rates. So the progress in labor costs is still short of where GM or Ford needs to see it to compete effectively worldwide. Meantime the automobile markets continue to change and grow worldwide. The American car companies cannnot wait, they have to make decisions based on the labor situation in the US and their response is to build new capacity in the Asian markets, even while maintaining labor peace at home so as not to have upheavals in the domestic markets in the USA. New product and designs can still be handled in the USA so GM could agree to make commitments for manufacturing new product at plants in the USA, while at a minimum getting the UAW to agree to take over health care responsibility and agree on the playing field in labor costs for the future, which would have to take into account global competition and not just a labor social contract from another era. Ford's 2 investments are in alliance with Mazda, of which it owns 33%, and which generated $168 million in profits in 2006. Of the product in Thailand 80% will be exported to the rest of Asia excluding China and India, and also to S. Africa and Australlia and New Zealand. It will make about 100,000 cars. Currently Thgailand exports about 650,000 vehicles out of production of 1.25 million vehicles. About 70% of exports are pickup trucks....

LyrArc Article Gist
ZTE of Shenzen, China has 3% global market share and has a new model the F230 which can show streaming video at broadband internet speeds. ZTE will double its cellphone sales to 60 million this year. In the mobile phone business things can change very quickly. The market for mobile phones can change very quickly, is defined by a younger demographic that loves to try new things, and where new technologies and capabilities get incorporated very quickly and in new combinations, navigation, video, broadband, different market segments from the lower end to the upper end especially in developing countries of Brazil, India and China, and the constant competitive churn that brings in new technologies and new companies like ZTE into the market. Upper management at Nokia realizes this as Motorola twice came up with hit models the Star-Tac and the Razr in 1996 and 2005, and each time falling behind after the one time hit. Motorola is even looking at exiting this market. New competitors are in the field with Apple's I-phone in 2007 and with Google and Microsoft developing new software for this market. It requires not just a product hit but a management team and a structure for manufacturing and distribution that is strong and resilient enough to respond to the changing market and to anticipate market trends that are just taking shape and to have the cultural mindset in management at upper and middle levels to deal with huge fast growing markets like India and China, and also Brazil, Russia and other developing countries in Asia and Latin America and Africa where the nature of the demand is different and varies among the different regions also. Nokia has come closest to putting this capability together. It has market share of 40% in this global market with sles in India of 8 million phones a month. There is room for competiton as competitors like Samsung sell about 200 million cellphones a month and are growing at 25% a year. Nokia is also taking a new approach to stay ahead. Its buying smaller companies and developing in-house technology to build its own mobile services business named Ovi. It acquired a number of software companies, acquiring Navteq for $8.1 billion for software on satellite location services. It has its own web portal and and lets wireless providers like Vodafone and Verizon offer their subscribers the option of using portals of Vodafone, Verizon or Nokia's....

LyrArc Article Gist
Biden sees his plan for American workers and families put together in the $3.5 trillion spending package that covers child care, education, healthcare, services, climate change proposals, infrastructure building, as a way to show that democratic governments can work for the people. After two decades when American workers and families were largely put aside in the nation's priorities during a tech driven and capital markets driven expansion that benefited large corporations, America is returning to its core concept of government by the people, for the people, of the people. White House officials say this is to be seen even in the program he put forward in his upset victory many years ago for the US Senate from Delaware. Because economic strength of America depends on a strong middle class, and strong working class, strong families, and underpins the world leadership role of America, even Republicans and hesitant Democrats, cannot give in to the current situation of doing nothing or too little for workers and families which weakens America. And at a time when its leadership role in Asia and Latin America, Africa is sorely needed. The size of the package in $3.5 trillion is because too little was done in the past in the mistaken acceptance of Reagan policies of no government role in the economy- surrendering this role of guidance entirely to the capital markets driven from New York, London, and Silicon Valley. The rise of China today, and also of Japan and South Korea, and of India as it plans for 2030 shows that government guidance of the economy is needed in global competition. Trade entirely driven by capital markets, without a role for government to emphasize national priorities in spending can lead to disastrous results such as we see today where manufacturing even in critical fields such as healthcare, semiconductor driven technology, entire parts of the economic structure are ceded to China and supply chains outside the US. German elections are also leading in the same direction with Social Democrats emphasizing national priorities in child care, education, healthcare, and delivery of social services, building of infrastructure. And the Greens emphasizing climate change. Merkel in Germany and in the European Union, her predecessor Schroeder, pursued policies of no government role in emphasizing and articulating national priorities, in a way that past US presidents have done, resulting in the CDU falling to 20% support in the September German elections. Across all parts of the world, from India, China, to Europe and the US, the focus is on government voicing the national priorities  and allocating funding instead of capital markets driven from London, New York and Silicon Valley, or capital markets in Shanghai or Mumbai, as the pandemic runs into its second year. ...

LyrArc Article Gist
Germany temporarily reintroduced border controls at the Austrian border on September 13, 2015, and supended rail service to Austria by Deutsche Bahn for 12 hours. About 40,000 migrants were expected to Germany on the weekend of September 12-13, making it hard for Germany to cope in such a short time. Economics Minister Sigmar Gabriel told newspaper Der Tagesspiegel "Europe's idleness in the migrant crisis is starting to push Germany close to its limits." This was also meant to send a message to Eastern European countries Poland, Czech Republic, Hungary, that have resisted cooperation in accepting refugees that the Schengen Agreement itself was at stake. The Schengen Agreement of 1985 is one of the key achievements for European unity by allowing free movement without passports within the 26 countries of the European Union. Germany's Interior Minister Thomas de Maiziere, described the move for border controls as a "signal to Europe that the German government will live up to its humanitarian responsibility, but the burden connected with the large number of refugees must be distributed in solidarity throughout Europe." A provision in the Schengen Agreement allows for border controls to be temporarily reintroduced in a emergency situation. ...

LyrArc Article Gist
Moody's assigns a junk rating to Portugal's government debt in May 2011.

LyrArc Article Gist
The amazing story of Abdel Hakim Belhaj who is seen as a foe by the CIA and turned over to Gaddafi's regime from Bangkok, followed by six years in Libyan jails. He is in the Western mountains near Tripoli leading a brigade that enters Tripoli. Because of the military discipline and experience gained in Afghanistan, Belhaj is put in charge of Tripoli by the Libyan Transitional Council. He looks to the future and is grateful to NATO and the U.S. for freeing his country. He holds no rancor for the past and looks to the future.

LyrArc Article Gist
Portugal in 2012-2013 stands as a good case study of what is good and what is bad about austerity measures, about what makes sense and is needed and what does not make sense and is bad both in a fiscal sense and for growth. Patricia Knowsmann does a good job of bringing this out, from the hundreds of stories written about austerity vs growth in the media. During 2011-2012, the elected government of Passos Coelho has supported an EU-IMF-ECB program that reduced wages, raised taxes, privatized state owned companies and changed labor laws that reduced hiring by businesses. During this time the Portuguese have patiently accepted the program compared to other countries and the budget deficit is shrinking from 9.8% in 2010 to an expected 5% in 2012. The unemployment rate has gone up to 15%. Now a new plan by prime minister Coelho in September has created an uproar and sparked popular opposition to the austerity measures threatening what has been achieved in deficit reduction, including the credibility of the austerity program. The plan is to reduce the portion of salaries that employers contribute to the social security system from 23.5% to 18%, in the hope that employers would increase hiring. At the same time it increases the portion of salaries employees pay from 11% to 18%. Coelho was looking at Germany and Slovenia where employees pay more than 20% of salaries to Social Security. What he failed to look at was the situation in Portugal where workers and pensioners have lost about 24% of their income through wage cuts and tax increases. The new plan would reduce incomes even further. Portugal's small business owners expressed strong disapproval for the plan because it would mean a drastic drop in consumer spending. The president of a Portuguese shoe maker, Kyaia, with 600 employees, says it makes no sense to reduce companies contribution if the company can't sell enough shoes to keep its workers. Kyaia has already experienced a 25% decline in demand and its CEO Fortunato Frederico, says he cannot understand how a company can hire workers if demand declines. This impact on consumer demand and sentiment is a fact that policymakers cannot ignore throughout the eurozone as austerity measures are implemented, especially when demand has already declined to an unacceptable point. The move by Coelho ignored a study by Portugal's finance ministry and central bank that showed export businesses may be induced to hire from the savings in contributions, but the businesses serving the domestic market would simply take in the savings. The EU-IMF-ECB recognized this and suggested increasing taxes to pay for the reduction in employer contributions, which would also depress demand by reducing incomes further. Portugal's economy and business is not focussed on exports, small business makes up 97% of Portugal's companies and most of them do not export. The introduction of such a plan gives credibility to the idea that there is a transfer of wealth from workers to business under the austerity programs, which affects the credibility of the entire deficit reduction and competitiveness improvement programs. For Coelho it also means the strong opposition of a minority party in his coalition government and from members of his Social Democratic Party. Large demonstrations were held on Sept 15 in 40 cities in Portugal in the first large scale opposition to further austerity measures and the Coelho social security contribution plan. Capital markets in Europe also see a problem with such plans because it removes the essential element of popular acceptance of deficit reduction plans jeopardizing the entire program. After the failure to win popular acceptance in Greece capital markets see additional risks and failures as one too many for the eurozone. ...

LyrArc Article Gist
P&G CEO, Bob McDonald, says the company will focus on getting things right in the North American market, before investing further in emerging markets. Price increases in the U.S. market for powdered laundry detergent, automatic dishwashing detergent, oral care, blades and razors, have led to loss of market share and P&G is working to reverse this situation by lowering the prices. After becoming CEO in 2009, McDonald pushed hard to increase sales in emerging markets- during the 70's and 80's P&G had neglected developing countries- and this now makes up 37% of sales, up from 20% in 2000. But margins are smaller in emerging markets, and there was a sense among shareholders that P&G had lost its focus in the largest markets in the U.S. and Europe.

LyrArc Article Gist
Mead points out that the world with an effective U.S. leadership based on democracy and the values we cherish is needed now more than ever, after the failures of the Bush and Obama administrations to provide the kind of balanced leadership all Americans can stand behind. A world without an effective and enlightened leadership from the U.S, is one in which the world could fall apart in regional rivalry, one in which the hundreds of millions of people in the poorer parts of India, China, Russia, Brazil, and other developing countries of the world, will have less opportunity to meet their aspirations for a better life. This is because a focus on development requires less regional rivalry and because serious missteps can reverse in a few years decades of economic progress as shown in the 2008 global financial crisis. More so because we live in an increasingly interdependent global economy. It is also the kind of world where suppression of freedoms and suppression of the opposition as in China and Russia, provides a wrong kind of message, a world in which we or our children would not want to live in. Russia, India and China, are too driven by rivalry and lack the deep experience to go it alone, multipolar is more likely to end up being multipolar rivalry leading to a race to the bottom, which would be bad for all, especially for the poor in Asia and the developing world. The 2008 crisis showed what some serious economic mistakes could do to employment and incomes in the world with output dropping by a third in most places. Political missteps could lead to a slippery slope of this magnitude but more difficult to correct. Greater participation in the political process and more enlightened leadership is needed in all countries to allow many voices and greater interaction across boundaries, focussing on the dangers of such multipolar rivalries. The world of the G-7 is already moving to the G-20 where many voices are heard and serious discussion of differences takes place, but participatory is different from multipolar....

LyrArc Article Gist
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.