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See Hamm 6/25/07 BW for how hiring by the likes of wipro and infosys in the US is reversing outsourcing phenomena. For Infosys it helps to be closer to customers in the US as it expands further. In this case of startups and smaller companies that setup shop in Bangalore to tap the lower wages there this is turning out to be no longer true as wages are rising and have reached 75% of US wages in the example given here.

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Wal-Mart's second quarter 2015 earnings decline by 15% over the prior year. Wage increases with minimum wage raised to $10 by Feb 2016. Wal-Mart is making investments in more employees per store, adding people at checkout lines to improve service, improving the look and feel of stores to get shoppers back and reverse earlier declines in per store sales. Per store sales increasd by 1.5% for the second quarter 2015, the fourth quarter of increases before a period of falling per store sales. Competing for sales are Amazon and dollar stores. Wal-Mart is also investing in online sales with the lower margins in this field. Wal-Mart's profit for the second quarter was $3.48 billion compared to $4.08 billion the prior year. Total revenue of $120.8 billion was close to what it was in 2014. Wal-Mart's strategies include asking suppliers to offer more price cuts and to put less into marketing, asking suppliers to pay additional fees for warehousing, and stocking from the shop floor for retail shelves instead of going to the backroom storage. Forecasts for online sales are lowered to reflect weaker international sales in UK, Brazil, with overall online sales growth now at high teens instead of the 20% range. The Chinese e-commerce site Yihaodian was acquired for $760 million for full ownership....

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Revenue is stagnant but IBM is increasing earnings per share by increasing margins and profits in its services and software business. The software business alone generates 43% of the company's profits. Services business accounts for 57% of its revenue. IBM also continues to expand in emerging markets making it possible for IBM to reduce the effects of cyclical swings in the economy. IBM shares are up 25% in the year to March 2012.

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After major declines in production in 2011 following the tsunami and earthquake, Japan's big three automakers are rebounding quickly in the domestic market. Toyota says its sales in April tripled to 107,826 in April from the prior year and exports increased six fold to 180,050. Nissan says domestic sales increased by 64% to 39, 413, and exports tripled to 52,660. Honda says domestic sales doubled to 55,500, and exports triped to 217,977.

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New car sales are increasing rapidly in the EU market in 2015. For the 1st quarter 2015 sales were up 8.6% to 3.5 million units, and 11% in March 2015, over the prior year, according to the European Automobile Manufacturers Association. Sales up significantly in Spain by 41%, in Portugal by 42% and Italy 15%, Greece and Ireland by double digits, France 9.3%, Germany 9%, for March 2015 over the prior year.

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New figures released by Britain's Office of National Statistics in June 2013 show a difficult road ahead for the British economy. Britain's economy is suffering from a lack of investment. Investment by firms declining by 34% since 2008 in real terms. Spending on machinery and equipment declining by 33%. Exports are 1.5% lower, even after pound sterling has dropped by 25% in trade weighted terms since 2007. Manufacturing output is 11% lower than in 2008.

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The shrinking of the 25 point lead of Joko Widodo over a Suharto era general, Subianto, as television networks shift support to Subianto. Indonesia's presidential elections are set for July 9, 2014. Widodo, is a popular governor of Jakarta, and the candidate of the Indonesian Democratic Party of Struggle. Its chairwoman is former president Megawati Sukarnoputri. The slow progress on infrastructure projects in Jakarta, including a light rail line, is affecting Widodo's lead.

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According to Eurostat Spain's total tax revenue as a percentage of GDP was 32.1%, lower than the eurozone average, which is above 40%. The underground economy in Spain is estimated to be about 20-25% of GDP. Spain's tax agency has relied on computerized records to track tax revenue receipts. The focus is now shifting to in person visits and tracking of businesses in the underground economy to make certain these businesses are paying taxes.

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Chavez wins 61% of the vote to Rosales' 38% and wins reelection for a six year term. Social goals will continue to dominate in Venezula's oil based economy. Importance of cooperatives for poorer classes. Development of a Bolivarist class of businessmen who support social goals with freedom to operate and benefit from oil resources fueled economy. Are their similiarities in a sense to pursuing welfare and equity goals to the elected government in Iran? Both are oil based economies and large producers with exploration and production issues, how do these similiarities and policy differences with the US affect oil access and prices?

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Improving performance of Toyota, Nissan and Honda in the U.S., Japan and emerging markets. Japanese automakers report higher profits in the fiscal fourth quarter. Sales for 2012 are expected to quadruple for Toyota in the 2012 fiscal year compared to fiscal 2011, according to analyst estimates. Part of the recovery is from weakening of the yen from 75 to the U.S. dollar in October 2011 to 81 in the March-April 2012 period. Profit margins are expected to improve for Toyota from 1.5% to 5.1% for Toyota, 5.4% to 7% for Nissan and 2.5% to 6.8% for Honda.

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Japan is not seriously affected by the slowdown in growth in China. Sales in China of Toyota, Uniqlo, and other companies are increasing. Japan's exports to China increased by 8.3% in May 2013 over the prior year. Toyota expects China sales to grow by 7% in 2013, compared to a decline of 4.9% in 2012. There is high demand for SUV's. Nissan and Honda expect sales increases in 2013 of 6% and 25%. Komatsu sales are recovering because of infrastructure projects in rural areas of China. Bank of Japan Governor Kuroda says the bank will monitor China closely, particularly the shadow banking system.

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Increased bank lending in China with lending going up by 20% in January 2009, suggest that state owned banks are following instructions to increase lending from the government. As bank and household balance sheets are healthy and domestic debt has fallen relative to GDP in recent years, the bank lending situation appears healthy. Medium and long term lending has increased strongly. The central bank plans to finance only 30% of the stimulus spending of $585 billion infrastructure package, banks will provide much of the rest. According to ING analyst Condon, transport infrastructure spending was up 61% over ayear earlier in December.

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The irony of the Afghan war is that the same pilots and planes that worked for the Soviet supported Afghan government, that the US under President Reagan supplied weapons and antiaircraft missiles to bring down, are now fighting the American war against insurgents. Antonov aircraft for transport and Mi-35 Hind helicopters, and Afghan crews that flew them are part of the airforce that the US is training and building up. The commander of Afghanistan's air corps is a formerMiG-21 pilot. By 2016 the 32 aircraft airforce is expected to grow to 120 aircraft at a total cost of $5 billion.

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As health care markets are slowing in western countries and price pressures are increasing Phillips is moving aggressively in emerging market countries like Brazil and India. It s market share in emerging market countries is 18.5% and it wants to push this upto 25%. And health care is becoming more important to Phillips as it scales back from consumer electronics. To understand and meet the different needs of these countries Phillips is acquiring local companies and redesigning its products so that they meet basic functions at a much lower price than the same product sold in western countries.

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Krugman points to some striking facts about China in 2011. Consumer spending in China is only 35% of GDP and has declined over the years. There are no signs of rebalancing the economy away from exports by increasing consumer spending. China's dependence on exports for trade surpluses is greater than ever. Beyond this there is another disturbing fact. With weak consumer spending and heavy investment spending at about half of GDP, Kugman raises the question where is all that increase in spending going? Real estate investment takes up about half of the increase in investment spending, as the share of GDP of real estate investment almost doubles compared to figures for 2000. Much of the rest of the increase Krugman attributes to firms selling to the construction industry. The speculative fever, the corruption at the local level, the shadow banking system which is not protected and unsupervised, the poor quality of statistics, suggest a bubble phenomena that may not be under control of policy makers, and risks damaging China economy and the world economy in 2012-2013. After all China's economic and financial planners and banks are no better than America's or Japan's, where asset bubbles burst causing serious damage....

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Mr. F. W. De Klerk, former president of South Africa from 1989 to 1994 and deputy president under Nelson Mandela till 1996, set the path for reconciliation and a mutiracial open society based on democratic process after Apartheid. Here he says some of the original vision for reconciliation and multiracial society based on constitutional processes is being lost under the presidency of Jacob Zuma of the ANC. He points to the growth rate of 5% achieved under president Thabo Mbeki from 2005 to 2007. The economic stagnation and corruption under the Zuma administration means South Africa is falling behind in tackling problems of wide disparity in incomes of the vast majority of black people, as only about 15% of the black population have benefitted under president Zuma. WIth political appointees in key positions for state run enterprises, municipal administration, and in the public service, services to the public are deteriorating. The Communist Party's hold on key postiions in the ANC and 12 cabinet positions, is reversing policies for an open economy with more state control. De Klerk says the point at which this happened was in Dec. 2007, when certain factions led by Mr. Zuma took control of the ANC at its national conference in Polokwane. The drop in commodities prices have hit South Africa hard and poor management of the economy adds to South Africa's many problems in 2015....

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The rapidly changing situation in energy is shown by the $15 billion German government rescue of Uniper, which contains the legacy fossil fuel assets of Germany's E.ON electricity maker. The war in Ukraine has made energy security a priority, leaving fossil fuel assets at risk of getting stranded. This is what happened at Uniper as Germany moves quickly to develop renewable sources to replace Russian fossil fuels. Clean energy investment is increasing rapidly as many green energy options are cost effective. Two thirds of electricity is generated in countries where it is cheaper to build new solar or onshore wind facilities than to run existing gas or coal powered facilities. Offshore wind with newer technologies will soon be cheaper also. Higher fuel and emissions prices, the cost of running older facilities in extreme weather, also increase risk of stranded assets.   To understand how quickly the situation is changing and can lead to stranded assets - solar energy is now half the cost of energy from coal or natural gas at today's prices as shown in the graphs in this WSJ article. Large investment in research and new technology will only decrease the cost of solar and wind energy to 2025 and 2030, increasing the investments in renewable energy and speeding up the curve for transition to renewable sources, with the added impetus of government support to achieve COP26 targets. ...

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Without good governance India would fail to meet the aspirations of its youthful population of 1.2 billion people. The prevailing sense of impunity brought the country to an impasse 10 years ago and development of the country to a standstill, says prime minister Modi. Only 15 paise out every rupee reached the final beneficiary of government programs leading to a loss of confidence in government, said one prime minister. At this rate 16 lakh crores rupees out of 27 lakh crores transferred to final beneficiaries and the poor would have been lost, says pm Modi. During the struggle for independence of the 1940's, the drafting of the new constitution, early period after independence with distractions of partition, Mohandas Gandhi, Sardar Patel, Nehru, did not realize that for a period that would stretch from the 1950's for about 70 years almost as long as half of the period of British rule India's institutions would struggle to operate. India's institutions so carefully set up would struggle to operate effectively as political parties turned to state and local funds meant for development to finance their election campaigns. A new culture got entrenched that considered this to be an acceptable way of operating- destroying the chances of development in the world's largest nation and keeping 1.2 billion people in a permanent state of underdeveloped economy.    ...

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As shown in this Guardian report about clean tap drinking water in China in 2017 pollution of rivers and lakes was so severe that anywhere between half to 80 of water in rivers was not drinkable. This was just before the pandemic. Efforts since 2015 to tackle the problem are still in progress. This is happening as India works on getting 100% of 190 million homes covered for drinking tap water in India by 2024. Out of this 116 million homes or 60% have clean drinking tap water in 2023 under prime minister Modi's  Jal Jeevan Mission (Water for Life) led by IAS's Mr Parmeswaran. India and China started out in 1990 with about the same GDP. China attracted foreign investment to accelerate its economic growth to where its GDP is much higher today than India. Yet in 2023 India starting from behind has some advantages. In the case of clean drinking water, limiting contamination of the rivers with effective regulation of industries which was missing in China, and providing clean drinking water with newer technological means is one of these advantages. Indian investment comes with the technology of the 2020's compared to China's investment using technology from the 2000 period. This will create additional gains in GDP and quality of GDP in its challenge of matching and exceeding growth in China. ...

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The drop in the value of the Turkish currency, the lira, hits ordinary Turks as it pushes up the price of food, medicine and other essentials. The lira has dropped by over a third of its value against the dollar in 2021. This is leading to a decline in living standards in Turkey, says this report in WSJ. President Erdogan is pushing an unconventional strategy to increase growth, by having the central bank cut interest rates as the value of lira drops sharply. This could lead to further drops in the lira making it difficult to make dollar debt repayments says this report in WSJ. The problem extends beyond drop in standard of living for average Turks. The country's banks are affected and companies that have borrowed heavily in US dollars and foreign currency denominated debt. A large mismatch between foreign currency debt such as dollar debt and the country's foreign exchange reserves has led to countries such as Argentina falling behind and seeking IMF assistance. WSJ points out that Turkey has about $160 billion in foreign exchange assets, and $280 billion in liabilities as of August 2021, according to the Turkish central bank. Bank lending in foreign currency is 24% to 45% of their total loans in the first half of 2021, according to Fitch Ratings. This could lead to dollar debt rollover difficulties as debt repayment comes due in April 2021. ...

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Officials of 130 countries met virtually to agree on a global minimum tax rate. A minimum tax rate of 15% would be paid by corporations in each of the countries in which they operate so that tax avoidance is prevented. The Group of 20 major economies including India and China also agreed to this change in taxation to ensure that all companies pay their fair share of taxes. It is also part of the Biden plan for tax revenue generation to fund the infrastructure and human needs in health, education and public services that were neglected for so long. US president Biden says- "This will level the playing field and also make America more competitive. And it will allow us to devote the additional revenue we raise to make generational investments, which are necessary to keep America's competitive edge razor sharp in today's global economy." This tax change was needed to prevent companies shopping for low tax locations such as Ireland. This kind of locating in low tax rate locations worked badly for the major G-20 economies for decades as it prevented the generation of revenues needed for essential services and infrastructure investments. Tax changes include Biden's plan to increase the corporate tax rate to 28% from 21%, and raise the minimum tax on US based companies foreign profits to 21% from 10.5%.  ...

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The need for earth friendly diets is shown in this editorial in The Guardian. Animal based products account for 57% of greenhouse gas emissions compared to 29% for food from plants. An outsize meat and dairy industry accounts for about 15% of the world's greenhouse gas emissions according to UN message in 2021. Mr. Dimpleby is Britain's food minister. He says a 30% reduction in meat eating would make it possible to have sustainable land use in Britain. The Guardian says high income countries are eating double the meat, poultry and fish products that they should be eating for living within the planetary sustainable living boundaries- that is to have no net environmental damage. Go back to the periods before 1600 and European, American, high income countries consumption of animal based foods was a fraction of what it is today.  A new legal regime is seen as a fair, just and sustainable living oriented solution. The Netherlands is doing just this to reduce the size of its large animal and dairy industry as a step towards more sustainable living and planet. It is not easy to convince farmers yet the public supports such a move. With the fires, floods and drought in Europe there is increasing awareness that action needs to be taken even where it is difficult.  ...

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Wisdom and common sense made Michael Boskin to suggest that trade between India and Pakistan should increase in 2012. Boskin was the elder Bush's chairman of the Council of Economic Advisers and helped setup the NAFTA, North American Free Trade Agreement. Boskin says in this WSJ article on April 15, 2012 that trade between India and Pakistan of $2.7 billion was only two thirds of the trade India had with much smaller Sri Lanka. In 2020 OEC data show it to be less than $300 million for trade between India and Pakistan,  and in the Pakistan floods year of 2022 with a third of the country below water the smooth flow of goods and products over borders never made more sense. Boskin said in the WSJ in 2012 that normally bilateral trade follows the "gravity model" of being proportional to the countries GDP and inversely proportional to the distance between them. He then cites estimates of Amrita Batra of Nehru University and Mohsin Khan of the Petersen Institute that show bilateral trade should be 20 times the $2.7 billion in 2012. This would be $50 billion in 2012 ten years ago. In 2020 this would be over $100 billion, not one three hundredth of that at $300 million in 2020 an alarmingly low level of trade between neighboring countries.   ...