‘Fine’ on China goods dealers in Arunachal
Guwahati, Feb. 9: Buying, selling or using anything with a made-in-China tag now invites a ‘fine’ of Rs 10,000 in Arunachal Pradesh. That goes for relishing Chinese food too. Less than two months after setting a deadline for traders and consumers to stop using Chinese goods, the All Arunachal Pradesh Students’ Union (Aapsu) began burning China-made products on Monday. Barely 24 hours later, the union ‘imposed’ a fine on anyone “collaborating to help Chinese economy”. The Aapsu show of anger is against Beijing’s “undue” territorial claim over Arunachal Pradesh. It, leaders of the organization said, is also a reminder to New Delhi not to be in awe of China and hit the Red Dragon where it hurts the most. “We are doing what the Indian government should have been,” Aapsu president Takam Tatung told Hindustan Times from State capital Itanagar. “We are born Indians and we will die Indians. Why should we let in and use products of a country that is bent upon grabbing our ancestral land? This (making a bonfire of Chinese goods) is the only way of exposing China’s expansionist policy to the world.” Tatung said his organization had eased the month-long ultimatum by a week after the Arunachal Chamber of Commerce and Industries pleaded time to dispose of stock of Chinese goods procured earlier.
The Congress government headed by Dorjee Khandu – no less a Beijing-baiter – is yet to officially react to the Aapsu’s vigilantism against users of Chinese goods. “But we will ensure they don’t go overboard with this unacceptable fiscal penalty,” a government spokesperson said.
Hindustan Times
Thursday, February 11, 2010
SIKKIM: A paragliding centre envisaged by TAAS
Travel Agent Association of Sikkim (TAAS) has been planning to make another paragliding centre in the vicinity of Capital, Gangtok. Accordingly, on 21st February a paragliding demonstration will be held at Themi Dara (Ranka) near Jhakri Falls, 5 kilometer from Gangtok.
Twenty five people including three women are expected to take part in the demonstration. They are already trained from Manali of Himachal Pradesh under capacity building training by Sports and Youth Affairs Department, Govt. of Sikkim, informed by Mr. Lukendra Rashaily, General Secretary of TAAS.
He said upon a successful demonstration a Paragliding centre will be formed at the location.
[SOURCE: SIKKIM REPORTER/EDITED BY ASHOK CHATTERJEE]
Travel Agent Association of Sikkim (TAAS) has been planning to make another paragliding centre in the vicinity of Capital, Gangtok. Accordingly, on 21st February a paragliding demonstration will be held at Themi Dara (Ranka) near Jhakri Falls, 5 kilometer from Gangtok.
Twenty five people including three women are expected to take part in the demonstration. They are already trained from Manali of Himachal Pradesh under capacity building training by Sports and Youth Affairs Department, Govt. of Sikkim, informed by Mr. Lukendra Rashaily, General Secretary of TAAS.
He said upon a successful demonstration a Paragliding centre will be formed at the location.
[SOURCE: SIKKIM REPORTER/EDITED BY ASHOK CHATTERJEE]
Films from northeast take centrestage at Mumbai International Film Festival: Sikkim efforts welcomed.
Mumbai, Feb 9 : The ongoing 11th Mumbai International Film Festival (MIFF) has provided a platform for the filmmakers from country's insurgency hit northeastern states to showcase their hidden talents behind and in front of the camera.
The event being organized in collaboration of the Maharashtra Government will be screening a number of short films, documentaries and animation films from the region of the Seven Sisters.
The film festival, which was inaugurated by Information and Broadcasting Minister Ambika Soni on February 3, will conclude today (February 9).
When asked about the criteria for the selection of the films for the event, Chanoba Thiyam, a northeast based filmmaker whose film 'Eye for an I' is being screened, said: "I don't know, may be because people liked it. That's why they selected 10 films in the festival. For that I don't have a specific reason, why they choose that kind of films. May be we are kind of making good films."
The films have impressed people, who have appreciated them in terms of the varied subjects and treatment.
The variety of the films also reflects the heterogeneous cultures of the northeast.
"We don't know that area at all, so it was through the MIFF. The MIFF is giving us a platform through documentaries. The filmmakers come here. They are coming from Sikkim, they are coming from Imphal, they are coming from Arunachal Pradesh and they are coming from Mizoram and they are bringing some lovely movies," said Nita Vajpayee, a movie-goer at the MIFF.
The filmmakers of the trouble torn northeastern region of India have toiled against assorted odds to screen their creative and subjective projects at this festival.
Northeastern region is home to several tribes projecting the most colourful cultural and musical heritage of India despite separatist revolts over the past couple of decades demanding autonomous rule among others.
Amidst this scenario, filmmakers of the region have taken great pain to continue their passion for filmmaking.
Mumbai, Feb 9 : The ongoing 11th Mumbai International Film Festival (MIFF) has provided a platform for the filmmakers from country's insurgency hit northeastern states to showcase their hidden talents behind and in front of the camera.
The event being organized in collaboration of the Maharashtra Government will be screening a number of short films, documentaries and animation films from the region of the Seven Sisters.
The film festival, which was inaugurated by Information and Broadcasting Minister Ambika Soni on February 3, will conclude today (February 9).
When asked about the criteria for the selection of the films for the event, Chanoba Thiyam, a northeast based filmmaker whose film 'Eye for an I' is being screened, said: "I don't know, may be because people liked it. That's why they selected 10 films in the festival. For that I don't have a specific reason, why they choose that kind of films. May be we are kind of making good films."
The films have impressed people, who have appreciated them in terms of the varied subjects and treatment.
The variety of the films also reflects the heterogeneous cultures of the northeast.
"We don't know that area at all, so it was through the MIFF. The MIFF is giving us a platform through documentaries. The filmmakers come here. They are coming from Sikkim, they are coming from Imphal, they are coming from Arunachal Pradesh and they are coming from Mizoram and they are bringing some lovely movies," said Nita Vajpayee, a movie-goer at the MIFF.
The filmmakers of the trouble torn northeastern region of India have toiled against assorted odds to screen their creative and subjective projects at this festival.
Northeastern region is home to several tribes projecting the most colourful cultural and musical heritage of India despite separatist revolts over the past couple of decades demanding autonomous rule among others.
Amidst this scenario, filmmakers of the region have taken great pain to continue their passion for filmmaking.
Nagarjuna set to tie up funds for Rs 7,000 cr Andhra plant
280 MW Project in Sikkim
Hyderabad-based Nagarjuna Constructions Company (NCC) is expecting to achieve financial closure for its 7,000 crore coal-based power plant project in Srikakulam district of Andhra Pradesh in the first quarter of financial year 2011. The project, once completed, would have capacity of 1,320 megawatts (mw).
“We have got clearance from the union ministry of environment and forest for the project. The project requires 1,500 acres of land, of which, the state government has allotted 1,000 acres and we bought the remaining 500 acres,” managing director A Ranga Raju told Financial Chronicle.
Raju said the company has also secured coal linkages for the project. “We are talking to financial institutions for financial closure of the project, which is expected to happen in next three to four months,” Raju disclosed.
At present, NCC is working on three power projects — a 100mw plant in Himachal Pradesh, a 1,320mw plant in Andhra Pradesh and a 280mw plant in Sikkim.
Despite several power generation companies having evinced interest in acquiring coal mines, NCC, at least for now, does not seem to have any such plan. “Earlier, we were excavating land for mining companies. But now we have started bidding for tenders called by PSUs for overburden removal and coal extraction as an EPC contractor,” Raju said.
280 MW Project in Sikkim
Hyderabad-based Nagarjuna Constructions Company (NCC) is expecting to achieve financial closure for its 7,000 crore coal-based power plant project in Srikakulam district of Andhra Pradesh in the first quarter of financial year 2011. The project, once completed, would have capacity of 1,320 megawatts (mw).
“We have got clearance from the union ministry of environment and forest for the project. The project requires 1,500 acres of land, of which, the state government has allotted 1,000 acres and we bought the remaining 500 acres,” managing director A Ranga Raju told Financial Chronicle.
Raju said the company has also secured coal linkages for the project. “We are talking to financial institutions for financial closure of the project, which is expected to happen in next three to four months,” Raju disclosed.
At present, NCC is working on three power projects — a 100mw plant in Himachal Pradesh, a 1,320mw plant in Andhra Pradesh and a 280mw plant in Sikkim.
Despite several power generation companies having evinced interest in acquiring coal mines, NCC, at least for now, does not seem to have any such plan. “Earlier, we were excavating land for mining companies. But now we have started bidding for tenders called by PSUs for overburden removal and coal extraction as an EPC contractor,” Raju said.
Wednesday, February 10, 2010
PPF- EXCELLENT INVESTMENT INSTRUMENT
For a long-term goal, such as investing for your child's higher education child's higher education or planning for your retirement, our advice remains bullish on equities. But one debt product that always remains a favourite to lend stability to your portfolio, without compromising on returns, is the state-guaranteed Public Provident Fund (PPF).
However, some investors are finding it difficult to open a PPF account in the name of their minors. We asked India Post, that offers the product, if banks were notified to do so and this is what the official had to say: "An adult can open a PPF account in the name of his minor from either a post office, some nationalized banks like the State Bank of India, Punjab National Bank, Central Bank of India, Syndicate Bank and private banks like HDFC Bank and ICICI Bank."
The reason that some banks are not happy about opening a PPF account for your child could be the extra work for a small amount.
Says Harsh Roongta, CEO, ApnaPaisa.com: "It depends on the bank branch and is not a practice across banks.
Some banks that do re- fuse say that opening an account in the name of the minor is unnecessary because an individual can only invest up to Rs70,000, including that of his minor's."
With that bit out of the window, there is a good reason why you should hurry and open a PPF account in the name of your child. It is the only long-term debt instrument that offers a guaranteed risk-free return of 8% and the way it is structured makes for discipline investing.
More on PPF You can open a PPF account in your name and in the name of each of your children individually. However, you cannot exceed an overall investment limit of Rs70,000 between you and the kids. This means that you need to apportion money so that the total does not exceed Rs70,000. Investment can only be made in multiples of Rs500. Investments in PPF also give tax deduction benefit under section 80C of the Income-tax Act. The proceeds are tax-free.
PPF works like an annual or a monthly systematic investment plan (SIP). You need to invest some amount in the account every year (you can do so 12 times a year). It comes with a lock-in of five years.
The option of partial withdrawal is available from the end of the fifth year. From the sixth year, you can withdraw up to 50% of the amount lying in the account at the end of the fourth year preceding the year of withdrawal or at the end of the year preceding the with drawal, whichever is lower.
If your bank refuses to open an account in the name of a minor, you can approach a post office or bump up your individual PPF ac count. But this would require disci pline and a cultivat ed habit of refrain ing from dipping into your account for funds. If the ac count is in your name, you can nominate your child or spouse as the beneficiary. If the subscriber dies, the money in the PPF account would go to the nominees on or before maturity.
What should you do?
The power of compounding works magic and, therefore, we suggest you open a PPF ac count as soon as your child is born. Picture this. An MBA course that costs Rs6 lakh to day will cost Rs15.92 lakh 20 years from now, assuming the rate of inflation is 5%.
If you invest right away you will have to invest Rs34,788 every year, but if you wake up only when your child is five years old and joins school, you will have to invest Rs58,632 each year.
Amar Pandit, a Mumbai-based finan cial planner, says: "PPF is the one of the best long-term debt prod ucts that we recom mend to our clients."
Typically, there are two stages at which you will need a huge influx of funds: a good undergraduate college or a good masters. If you open a PPF ac count in the name of your child within the first year of his life, you will have a PPF account ripening when your child may be a couple of years from finishing school.
You will need to take a call at that point. You can either withdraw your funds completely and park in a short term debt instrument, such as a good income fund or maybe a fixed deposit to meet the need of your child's higher education. If you don't need the cash immediately, we would recommend you extend the term by an other five years--PPF can be extended in five-year batches--if the rates are still fa vourable. This may help you meet the need of your child for higher studies.
Says Pandit: "The re turn that PPF offers is by far the best. You must keep extending your PPF account if you do not have a pressing need and make partial withdraw als, if need be. A with drawal of up to 60% of the maturity corpus is allowed during the ex tended tenure."
PPF is an excellent investment tool and we recommend that you park at least 40% of your funds ear marked for your child in this instrument.
For a long-term goal, such as investing for your child's higher education child's higher education or planning for your retirement, our advice remains bullish on equities. But one debt product that always remains a favourite to lend stability to your portfolio, without compromising on returns, is the state-guaranteed Public Provident Fund (PPF).
However, some investors are finding it difficult to open a PPF account in the name of their minors. We asked India Post, that offers the product, if banks were notified to do so and this is what the official had to say: "An adult can open a PPF account in the name of his minor from either a post office, some nationalized banks like the State Bank of India, Punjab National Bank, Central Bank of India, Syndicate Bank and private banks like HDFC Bank and ICICI Bank."
The reason that some banks are not happy about opening a PPF account for your child could be the extra work for a small amount.
Says Harsh Roongta, CEO, ApnaPaisa.com: "It depends on the bank branch and is not a practice across banks.
Some banks that do re- fuse say that opening an account in the name of the minor is unnecessary because an individual can only invest up to Rs70,000, including that of his minor's."
With that bit out of the window, there is a good reason why you should hurry and open a PPF account in the name of your child. It is the only long-term debt instrument that offers a guaranteed risk-free return of 8% and the way it is structured makes for discipline investing.
More on PPF You can open a PPF account in your name and in the name of each of your children individually. However, you cannot exceed an overall investment limit of Rs70,000 between you and the kids. This means that you need to apportion money so that the total does not exceed Rs70,000. Investment can only be made in multiples of Rs500. Investments in PPF also give tax deduction benefit under section 80C of the Income-tax Act. The proceeds are tax-free.
PPF works like an annual or a monthly systematic investment plan (SIP). You need to invest some amount in the account every year (you can do so 12 times a year). It comes with a lock-in of five years.
The option of partial withdrawal is available from the end of the fifth year. From the sixth year, you can withdraw up to 50% of the amount lying in the account at the end of the fourth year preceding the year of withdrawal or at the end of the year preceding the with drawal, whichever is lower.
If your bank refuses to open an account in the name of a minor, you can approach a post office or bump up your individual PPF ac count. But this would require disci pline and a cultivat ed habit of refrain ing from dipping into your account for funds. If the ac count is in your name, you can nominate your child or spouse as the beneficiary. If the subscriber dies, the money in the PPF account would go to the nominees on or before maturity.
What should you do?
The power of compounding works magic and, therefore, we suggest you open a PPF ac count as soon as your child is born. Picture this. An MBA course that costs Rs6 lakh to day will cost Rs15.92 lakh 20 years from now, assuming the rate of inflation is 5%.
If you invest right away you will have to invest Rs34,788 every year, but if you wake up only when your child is five years old and joins school, you will have to invest Rs58,632 each year.
Amar Pandit, a Mumbai-based finan cial planner, says: "PPF is the one of the best long-term debt prod ucts that we recom mend to our clients."
Typically, there are two stages at which you will need a huge influx of funds: a good undergraduate college or a good masters. If you open a PPF ac count in the name of your child within the first year of his life, you will have a PPF account ripening when your child may be a couple of years from finishing school.
You will need to take a call at that point. You can either withdraw your funds completely and park in a short term debt instrument, such as a good income fund or maybe a fixed deposit to meet the need of your child's higher education. If you don't need the cash immediately, we would recommend you extend the term by an other five years--PPF can be extended in five-year batches--if the rates are still fa vourable. This may help you meet the need of your child for higher studies.
Says Pandit: "The re turn that PPF offers is by far the best. You must keep extending your PPF account if you do not have a pressing need and make partial withdraw als, if need be. A with drawal of up to 60% of the maturity corpus is allowed during the ex tended tenure."
PPF is an excellent investment tool and we recommend that you park at least 40% of your funds ear marked for your child in this instrument.
Indian Pharma -Value in proportion volume
As Indian pharma players continued to invest in existing facilities which turned into goody bags with the ultimate solutions of contact manufacturing outsourcing, multinational pharma companies tried to thrust their capex plans on new drug development. Usha Sharma reports…
India is a fast growing contract manufacturing outsourcing market valued at $1.1billion and is growing at a rate of more than 40 percent, which is thrice rate of the global market growth rate. Indian pharma market is the second largest producer of pharma products by volume and 13th by value,accounting for around eight percent of global production, and is highly fragmented. It employs around 5,00,000 people. Indian companies were quick to realise the opportunities in the global pharma manufacturing market and have undertaken significant investments in the last decade in creating capacities of global standards to serve the highly attractive regulated markets. At present, India has around 119 US FDA and 84 UK MHRA approved plants and accounts for one third of drug master files (DMFs) and highest number of Abbreviated New Drug Application (ANDAs) in the US. Ajit Mahadevan, Partner, Health Sciences Advisory Services, Ernst & Young, justifies the figures, "This is driven by its ability to create a differentiating cost value proposition powered by its lower manufacturing costs, skilled manpower and strong technical capabilities. India's share of the outsourcing market is estimated to grow from 2.8 percent in 2007 to 5.5 percent in 2010."
India, being a low cost manufacturer, will hold a significant market share in global active pharmaceutical ingredients (APIs) and drug product market. The facility and regulatory affairs (RA) are the two key areas where India is superior to China and many other developing countries. Most of the Indian pharma companies are spending negligible amount of investment in R&D, even though Government of India is supporting the pharma industry in the form of soft loans, grants and industrial institute partnership programmes. The Indian market for clinical research outsourcing was valued at around $200 million in 2007, according to a KPMG study nearly three times its value in 2001-02. It is predicted to reach a value of $500-$600 million by 2010, with a 15 percent share of the global clinical trials market in the following year. Whereas, worldwide revenues for pharma industry Contract Manufacturing and Research Services (CRAMS) were estimated at about $150 billion in 2008 and will grow at an average annual rate of 12 percent over the next five years. Within this total, the global market for contract manufacturing of prescription drugs was estimated at about $40 billion in 2008. The over-the-counter (OTC) medicines and nutritional products sector will show the fastest growth.
Enhancing existence pavilions
"Today, there are a number of Indian pharma companies who are geared to meet these standards. Also, Government policy should be favourable to industry. Indian pharma companies should lay more and more emphasis on quality and cost to maintain an advantage globally"
- Nikunj Kanakia
CMD
Lifeline Industries
"As big pharma companies continue to jostle with the challenge to maintain growth and contain cost, outsourcing is likely to become a compulsion than more of a strategic choice and India with its manufacturing prowess and inherent advantage of talent, cost competitiveness, ability to maintain global quality parameters"
- Ajit Mahadevan
Partner
Health Sciences Advisory Services Ernst & Young
India is rated highest in terms of cost efficiency among prominent manufacturing locations in Asia and Eastern Europe. The manufacturing cost in US FDA approved plants in India is 65 percent lower than in US and 50 percent lower than in Europe. Indian pharma companies, being low cost manufacturers coupled with skilled manpower and strong technical capabilities, have an excellent opportunity to play as contract manufacturer outsourcings (CMO) for global pharma companies. Indian companies have broader global presence because of their low cost manufacturing, strong chemistry and mathematics in reverse engineering, large pool of technically qualified English speaking workers and high quality products. Seeing CMO's prominent growth prospect in the industry, K C Jindal, President-R&D Formulations FDC, highlights the key points , "The recent economic meltdown in developed nations have promoted generic prescriptions that may facilitate the growth of Indian generic drug manufacturers operating in regulated markets. We are well-advanced and non-inferior to Western countries in terms of manufacturing technologies, facilities and understanding of regulatory requirements of developed markets. Biotechnology is another area having tremendous growth potential where further attention is required, as currently, India is far behind even from China."
Adequate number of manufacturing facilities already exist in India to meet the current requirements. Many big Pharma companies have under utilised capacities, whereas plants of small companies need to be upgraded. Beside R&D, areas which need continuous nurturing include quality systems, analytical capabilities and Intellectual Properties Rights (IPR) management. Indian companies should respect the IPR of global players and their domestic counterparts. Although the number of patents filled by Indian pharma companies is increasing steadily, still lot needs to be done to encourage innovation.
He further says, "Contract manufacturing would help in terms of optimum capacity utilisation for big pharma companies. Global pharma companies are in trouble with falling new chemical entity (NCE) productivity, short product life, rising regulatory hurdles and greater generic competition. Further, due to economic melt down, both innovator and generic companies in US and Europe are facing un-precedent pricing pressure."
In the long run
Investment in creating capacities needs to meet stringent global quality parameters such as US FDA, UK MHRA etc., which is imperative for Indian players to serve the high value regulated markets. However, the decision to either upgrade the existing facility or create a greenfield facility is dependent on multiple factors such as target market, capacity required, technology employed, category of products (cytotoxic and many biological products require a separate standalone facility), tax and fiscal incentives (in SEZ and dedicated pharma zones), etc.
Vikram Gupta, Chief Operating Officer, IndiaVenture Advisors, positively comments, "Whenever, there is a choice between building a new facility and expanding from the existing facility, the natural choice will move towards returns on investments perspective. It would be in terms to expand the existing facility due to fewer regulatory requirements, synergy of resources; overheads can be upgraded from the existing facility (utilities, administrative costs, storage capacities, indirect manpower etc.), faster execution of projects-typically expansion of existing facilities—is much faster as compared to setting up from scratch because incremental set up takes much lesser time as compared to setting up everything new. Utilisation of existing logistics network, a new location would require setting up of warehouses and transportation support for raw materials and finished goods.
He continuous however that a new facility construction may be mandated due to unique technology required to manufacture the products, availability of specialised skills only in select geographies, special incentives in tax free zones, and confirmed long-term orders at decent prices for products requiring specific design of manufacturing facilities and environmental and regulatory requirements.
Jindal comments, "In coming three to five years lot of drugs are going off patent in the highly regulated developed markets. Since, India has the largest number of US FDA plants and we adhere to international regulatory norms more effectively as compared to our competitors, we see India emerging as a major hub for pharma manufacturing."
Mahadevan avers, "As big Pharma companies continue to jostle with the challenge to maintain growth and contain cost, outsourcing is likely to become a compulsion than a strategic choice, and India, with its manufacturing prowess and inherent advantage of talent, cost competitiveness, ability to maintain global quality parameters, etc is well positioned to be at the forefront. The recent outsourcing deal between global pharma majors and Indian pharma companies for supply of generic drugs are an indication of the same."
"You cannot get the benefits and you have to upgrade on regular basis to keep pace with the ever evolving demand. Moreover you have experienced hand to take care of the plant and market as well"
- Vijay Singla
President Drugs
IOL Chemicals and Pharmaceuticals
"Contract manufacturing would help in terms of optimum capacity utilisation for big pharma companies. Global pharma companies are in trouble with falling new chemical entity (NCE) productivity, short product life, rising regulatory hurdles and greater generic competition"
- K C Jindal
President
Research and Development Formulations
FDC
"Whenever, there is a choice between building a new facility and expanding from the existing facility natural choice will move towards returns on investments perspective. It would be in terms to expand the existing facility due to fewer regulatory requirements"
- Vikram Gupta
Chief Operating Officer
IndiaVenture Advisors
Vijay Singla, President-Drugs, IOL Chemicals and Pharmaceuticals, says, "We believe in upgrading existing facilities over building new facilities without actually investing substantially in upgradation. You cannot get the benefits and you have to upgrade on regular basis to keep pace with the ever evolving demand. (CLARIFY)Moreover you have experienced hand to take care of the plant and market as well."
After seeing global pharma companies' business strategy, Mahadevan analyses the trend that, "The positive outlook justifies the investment by Indian players as they prepare themselves to emerge as the partner of choice for global pharma companies. The current period can be regarded as the nurturing and expansion phase for Indian companies as they are investing significant capital in creating world class capacities. The next five to six years would witness Indian contract manufacturing players reach an inflexion point as the scale of contract manufacturing is likely to increase manifold. Moving ahead, investment in R&D, quality control and environmental, health and safety (EHS) functions would be critical to attain global competitiveness."
The companies would invest in creating visibility and showcasing their strengths globally. For Indian contract manufacturing players, the ability to break-even quickly and earn returns on investment will depend on multiple factors such as size and depth of product portfolio (complex product will attract higher margins), ability to secure large and multi-year contracts, ability to manage multiple vendors, ability to contain cost etc.
Dr Kamal K Sharma, Managing Director, Lupin, optimistically syas, "Pharma outsourcing is a synergistic effort, and requires skills and expertise, both on the part of the outsourcer and the service provider. It calls for the availability of a highly skilled scientific manpower, discovery chemistry, reverse engineering skills, and a commitment to quality factors that lend to the development of the industry as a whole. Knowledge gained does not only help the outsourcer, but also aids in the maturing and evolution of the Indian players, sharpening and honing their research abilities and imparting valuable know-how. All these factors together point to the blooming of a culture of innovation that is being witnessed in the Indian industry today."
He goes on to say, "As such, there is no threat of outsourcing harming Indian players, but in fact the contrary. The expertise gathered through this exercise, combined with increased revenue inflow, will enable Indian players to further invest in R&D — both for the generics and innovative segment. Thus, outsourcing will only help boost the 'innovation processes in India'."
Therapeutically growth driven
Jindal tries to explain therapeutics growth move, “The result of lifestyle modification in developed nations is evident with increasing risk of cardiovascular, metabolic and psychic disorders. These areas can be considered as thrust areas for Indian contract manufactures. There are certain therapeutic areas like cytotoxics, beta-lactam antibiotics, sex hormones, immuno-suppressants and aerosols whereas in western world it would like to preferably outsource the manufacturing facilities for drug products and APIs due to environmental and safety issues. The low cost advantage of Indian manufacturer will attract multinationals for contract manufacturing.” He further highlights that, global projects on HIV/AIDS fetched large contract manufacturing orders for anti-retroviral drugs due to cost advantages. There is absolute necessity for upgradation of existing facilities that should get approved from Western drug regulatory agencies so that there is adequate capacity utilisation. However, new facilities may have to be created in niche areas like cytotoxic, hormonal and pulmonary drug delivery products. In the domestic market, anti-infectives have the highest contribution (19 percent) to the total domestic sales. Cephalosporins, penicillins and quinolones are key drug classes among anti-infectives. Gastrointestinal and cardiac are the second and third largest therapeutic categories, respectively. Oral anti-diabetics and anti-peptic ulcerants are the fastest growing segments under alimentary and metabolism therapeutic categories.
Cholesterol reducers have emerged as a key class of cardiovascular drugs in the last few years. Anti depressants accounted for about 15 per cent of the total revenues of the central nervous system (CNS) segment in 2007-08. Around 40 percent of disease burden globally is contributed by top five therapeutics areas—oncology, cardiology, anti-infectives and diabetes.
Cancer accounts for an estimated 7.6 million deaths globally. The oncology pipeline is the richest in number and potential in value, with a large number of pharma and biotech companies focusing on oncology drugs. About 30 percent of all launches in 2010 are expected to be in oncology. The global oncology drug market is growing at 17 percent annually. Presently, the Indian oncology market is expected to be at US$ 30 million.
"Between 1990 and 2005, a large number of global fine and specialty chemical companies restructured and downsised their operations. The traditionally integrated players in the western world saw merit in focusing on specific aspects of business and outsourcing all non-core areas, manufacturing in particular"
- Mahesh Malneedi
President
Makro Group
"As such, there is no threat of outsourcing harming Indian players, but in fact the contrary. The expertise gathered through this exercise, combined with increased revenue inflow, will enable Indian players to further invest in R&D - both for the generics and innovative segment"
- Dr Kamal K Sharma
Managing Director
Lupin
Recently, Indian companies have been focusing on new emerging areas such as biosimilars, oncology and other such drugs which are considered tough to manufacturer due to their complex nature and high skill required.
Oncology is the largest and one of the fastest growing therapy areas in the country and moreover has the highest number of active investigational new drugs (INDs). Biologics has the third-highest number of active INDs present in the pipeline. India has nascent capability in these areas currently since they require higher investment and highly specialised technology. Indian companies have identified the need to augment its capabilities in oncology and biologics. Currently, India has 200 companies working in the area of biotechnology with an emphasis on vaccines and bio-services. There are over a 100 national research centres in the country that support these activities.
Singla said, "Amongst the many therapeutic areas that might prove extremely profitable for Indian pharma companies anti-diabetic, anti-ulcerants and analgesic drugs are witnessing high growth in demand worldwide, and with many international patents, are completing their term in near future, which will make companies like ours to capitalise upon the vast opportunities. We had foreseen this scenario long back and have been preparing for the same with our expansion plans that include increase in production of Ibuprofen and setting up new plants for the production of proton pump inhibitors (PPIs), which will commence commercial production soon."
India is already one of the top players in global generic pharma industry. In order to sustain this position and be ahead in race, there is a need for constant investment in R&D. Indian domestic market is also steeply growing and hence pharma manufacturing in India may have better future than present day scenario.
Manufacturing capabilities
Presently, India accounts eight percent of the global pharma production activity making it the world's fourth-largest pharma producer. Around 64 percent of the total outsourcing is constituted by active pharmaceutical ingredients (APIs), wherein the country is ranked the third-largest player worldwide with 500 different APIs. Indian has a well established manufacturing base in formulations where it manufactures 60,000 packs across 60 therapy areas. The size of Indian pharma industries has been reported as $17 billion in 2007-08 with export consisting of nearly 52 percent of total market. In India, approximately 270 research based pharma companies and 8,000 small generic companies make a highly competitive market that produces high quality medicines at low cost than any other country.
Mahesh Malneedi, President, Makro Group, shares his views on the development of CMOs in India, "Between 1990 and 2005, a large number of global fine and specialty chemical companies restructured and downsized their operations. The traditionally integrated players in the Western world saw merit in focusing on specific aspects of business and outsourcing all non-core areas, manufacturing in particular. This opened up new avenues for many traditional Indian pharma companies with under-utilised capacities and expertise. Consequently, in the late 1990's, contract manufacturing activity jumped, though growth has slowed subsequently. More recently, India has emerged as an alternative research base for global pharma companies."
Driving competition
Though India is already established as a low-cost manufacturing base with significant technical and manpower capability driving its growth, it is important to realise that 80 percent of the industry is still based out of Europe and US and they would continue to pose a challenge for India. In addition, China has also been investing in building capability and will influence India's standing, in the medium/long term. Jindal says, "We need to upgrade our existing manufacturing facilities to the international standard. A number of facilities need upgradation both software and hardware to meet cGMP requirements of regulated markets. New facilities may be created in niche areas like oncology, hormone and pulmonary drug delivery products."
Setting up new facilities due to the above reasons can lead to superior returns on investments because of capital efficiency of Indian companiesas it offers attractive returns to Indian companies as they are able to reduce the up-front capital cost of setting up a project by as much as 25-50 percent due to access to locally fabricated equipment and high-quality local technology or engineering skills. Indian companies have been able to establish US FDA standard plants at approximately 50 percent lower capital costs as compared to US or Europe based manufacturing units.
Lower costs of production: The basic production cost in India is up to 50 per cent lower than that in the US there is 30 to 50 per cent lower depreciation,
FDA approved plants can be constructed in India for 30 percent to 50 per cent lower costs, leading to higher utilisation of equipment due to improved processes. There is 85 to 90 per cent manpower cost savings, and all savings are applicable across all hierarchal levels (eg, operators, research scientists, etc), and improved, more efficient processes contribute to lower labour costs per unit.
There is also 40 to 50 per cent savings in raw materials as bulk drugs can be manufactured in-house at 40 to 50 per cent of ethical cost, excipients and intermediates can be sourced locally at 20-30 per cent lower costs, and most other raw materials can be sourced internally and from China.
Looking ahead
Gupta avers, "In my view the Indian pharma manufacturing companies need to do the following to retain their position in the global pharma market namely—continuous upgradation of existing facilities, continuous training of the manpower, innovation in processes and technology, take advantage of economies of scale by creating optimal size capacities and continue with M&A activities across borders.
Nikunj Kanakia, CMD, Lifeline Industries speaks on the same line, "We should create facilities that are world class and meet global standards, in line with international regulatory norms like the US FDA, Australian-TGA, UK MCA, and EMEA. Today, there are a number of Indian pharma companies who are geared to meet these standards. Also, Government policy should be favourable to industry. Indian pharma companies should lay more and more emphasis on quality and cost to maintain an advantage globally."
"Indians enjoy an in-depth process understanding, revere se engineering skills, a technological bent of mind, combined with a large untapped talent pool which will further enable Indian players to have a competitive advantage vis-Ã -vis other countries. With global efforts to reduce healthcare costs, we are witnessing increasing instances of global giants outsourcing their R&D operations to India," ends Sharma.
As Indian pharma players continued to invest in existing facilities which turned into goody bags with the ultimate solutions of contact manufacturing outsourcing, multinational pharma companies tried to thrust their capex plans on new drug development. Usha Sharma reports…
India is a fast growing contract manufacturing outsourcing market valued at $1.1billion and is growing at a rate of more than 40 percent, which is thrice rate of the global market growth rate. Indian pharma market is the second largest producer of pharma products by volume and 13th by value,accounting for around eight percent of global production, and is highly fragmented. It employs around 5,00,000 people. Indian companies were quick to realise the opportunities in the global pharma manufacturing market and have undertaken significant investments in the last decade in creating capacities of global standards to serve the highly attractive regulated markets. At present, India has around 119 US FDA and 84 UK MHRA approved plants and accounts for one third of drug master files (DMFs) and highest number of Abbreviated New Drug Application (ANDAs) in the US. Ajit Mahadevan, Partner, Health Sciences Advisory Services, Ernst & Young, justifies the figures, "This is driven by its ability to create a differentiating cost value proposition powered by its lower manufacturing costs, skilled manpower and strong technical capabilities. India's share of the outsourcing market is estimated to grow from 2.8 percent in 2007 to 5.5 percent in 2010."
India, being a low cost manufacturer, will hold a significant market share in global active pharmaceutical ingredients (APIs) and drug product market. The facility and regulatory affairs (RA) are the two key areas where India is superior to China and many other developing countries. Most of the Indian pharma companies are spending negligible amount of investment in R&D, even though Government of India is supporting the pharma industry in the form of soft loans, grants and industrial institute partnership programmes. The Indian market for clinical research outsourcing was valued at around $200 million in 2007, according to a KPMG study nearly three times its value in 2001-02. It is predicted to reach a value of $500-$600 million by 2010, with a 15 percent share of the global clinical trials market in the following year. Whereas, worldwide revenues for pharma industry Contract Manufacturing and Research Services (CRAMS) were estimated at about $150 billion in 2008 and will grow at an average annual rate of 12 percent over the next five years. Within this total, the global market for contract manufacturing of prescription drugs was estimated at about $40 billion in 2008. The over-the-counter (OTC) medicines and nutritional products sector will show the fastest growth.
Enhancing existence pavilions
"Today, there are a number of Indian pharma companies who are geared to meet these standards. Also, Government policy should be favourable to industry. Indian pharma companies should lay more and more emphasis on quality and cost to maintain an advantage globally"
- Nikunj Kanakia
CMD
Lifeline Industries
"As big pharma companies continue to jostle with the challenge to maintain growth and contain cost, outsourcing is likely to become a compulsion than more of a strategic choice and India with its manufacturing prowess and inherent advantage of talent, cost competitiveness, ability to maintain global quality parameters"
- Ajit Mahadevan
Partner
Health Sciences Advisory Services Ernst & Young
India is rated highest in terms of cost efficiency among prominent manufacturing locations in Asia and Eastern Europe. The manufacturing cost in US FDA approved plants in India is 65 percent lower than in US and 50 percent lower than in Europe. Indian pharma companies, being low cost manufacturers coupled with skilled manpower and strong technical capabilities, have an excellent opportunity to play as contract manufacturer outsourcings (CMO) for global pharma companies. Indian companies have broader global presence because of their low cost manufacturing, strong chemistry and mathematics in reverse engineering, large pool of technically qualified English speaking workers and high quality products. Seeing CMO's prominent growth prospect in the industry, K C Jindal, President-R&D Formulations FDC, highlights the key points , "The recent economic meltdown in developed nations have promoted generic prescriptions that may facilitate the growth of Indian generic drug manufacturers operating in regulated markets. We are well-advanced and non-inferior to Western countries in terms of manufacturing technologies, facilities and understanding of regulatory requirements of developed markets. Biotechnology is another area having tremendous growth potential where further attention is required, as currently, India is far behind even from China."
Adequate number of manufacturing facilities already exist in India to meet the current requirements. Many big Pharma companies have under utilised capacities, whereas plants of small companies need to be upgraded. Beside R&D, areas which need continuous nurturing include quality systems, analytical capabilities and Intellectual Properties Rights (IPR) management. Indian companies should respect the IPR of global players and their domestic counterparts. Although the number of patents filled by Indian pharma companies is increasing steadily, still lot needs to be done to encourage innovation.
He further says, "Contract manufacturing would help in terms of optimum capacity utilisation for big pharma companies. Global pharma companies are in trouble with falling new chemical entity (NCE) productivity, short product life, rising regulatory hurdles and greater generic competition. Further, due to economic melt down, both innovator and generic companies in US and Europe are facing un-precedent pricing pressure."
In the long run
Investment in creating capacities needs to meet stringent global quality parameters such as US FDA, UK MHRA etc., which is imperative for Indian players to serve the high value regulated markets. However, the decision to either upgrade the existing facility or create a greenfield facility is dependent on multiple factors such as target market, capacity required, technology employed, category of products (cytotoxic and many biological products require a separate standalone facility), tax and fiscal incentives (in SEZ and dedicated pharma zones), etc.
Vikram Gupta, Chief Operating Officer, IndiaVenture Advisors, positively comments, "Whenever, there is a choice between building a new facility and expanding from the existing facility, the natural choice will move towards returns on investments perspective. It would be in terms to expand the existing facility due to fewer regulatory requirements, synergy of resources; overheads can be upgraded from the existing facility (utilities, administrative costs, storage capacities, indirect manpower etc.), faster execution of projects-typically expansion of existing facilities—is much faster as compared to setting up from scratch because incremental set up takes much lesser time as compared to setting up everything new. Utilisation of existing logistics network, a new location would require setting up of warehouses and transportation support for raw materials and finished goods.
He continuous however that a new facility construction may be mandated due to unique technology required to manufacture the products, availability of specialised skills only in select geographies, special incentives in tax free zones, and confirmed long-term orders at decent prices for products requiring specific design of manufacturing facilities and environmental and regulatory requirements.
Jindal comments, "In coming three to five years lot of drugs are going off patent in the highly regulated developed markets. Since, India has the largest number of US FDA plants and we adhere to international regulatory norms more effectively as compared to our competitors, we see India emerging as a major hub for pharma manufacturing."
Mahadevan avers, "As big Pharma companies continue to jostle with the challenge to maintain growth and contain cost, outsourcing is likely to become a compulsion than a strategic choice, and India, with its manufacturing prowess and inherent advantage of talent, cost competitiveness, ability to maintain global quality parameters, etc is well positioned to be at the forefront. The recent outsourcing deal between global pharma majors and Indian pharma companies for supply of generic drugs are an indication of the same."
"You cannot get the benefits and you have to upgrade on regular basis to keep pace with the ever evolving demand. Moreover you have experienced hand to take care of the plant and market as well"
- Vijay Singla
President Drugs
IOL Chemicals and Pharmaceuticals
"Contract manufacturing would help in terms of optimum capacity utilisation for big pharma companies. Global pharma companies are in trouble with falling new chemical entity (NCE) productivity, short product life, rising regulatory hurdles and greater generic competition"
- K C Jindal
President
Research and Development Formulations
FDC
"Whenever, there is a choice between building a new facility and expanding from the existing facility natural choice will move towards returns on investments perspective. It would be in terms to expand the existing facility due to fewer regulatory requirements"
- Vikram Gupta
Chief Operating Officer
IndiaVenture Advisors
Vijay Singla, President-Drugs, IOL Chemicals and Pharmaceuticals, says, "We believe in upgrading existing facilities over building new facilities without actually investing substantially in upgradation. You cannot get the benefits and you have to upgrade on regular basis to keep pace with the ever evolving demand. (CLARIFY)Moreover you have experienced hand to take care of the plant and market as well."
After seeing global pharma companies' business strategy, Mahadevan analyses the trend that, "The positive outlook justifies the investment by Indian players as they prepare themselves to emerge as the partner of choice for global pharma companies. The current period can be regarded as the nurturing and expansion phase for Indian companies as they are investing significant capital in creating world class capacities. The next five to six years would witness Indian contract manufacturing players reach an inflexion point as the scale of contract manufacturing is likely to increase manifold. Moving ahead, investment in R&D, quality control and environmental, health and safety (EHS) functions would be critical to attain global competitiveness."
The companies would invest in creating visibility and showcasing their strengths globally. For Indian contract manufacturing players, the ability to break-even quickly and earn returns on investment will depend on multiple factors such as size and depth of product portfolio (complex product will attract higher margins), ability to secure large and multi-year contracts, ability to manage multiple vendors, ability to contain cost etc.
Dr Kamal K Sharma, Managing Director, Lupin, optimistically syas, "Pharma outsourcing is a synergistic effort, and requires skills and expertise, both on the part of the outsourcer and the service provider. It calls for the availability of a highly skilled scientific manpower, discovery chemistry, reverse engineering skills, and a commitment to quality factors that lend to the development of the industry as a whole. Knowledge gained does not only help the outsourcer, but also aids in the maturing and evolution of the Indian players, sharpening and honing their research abilities and imparting valuable know-how. All these factors together point to the blooming of a culture of innovation that is being witnessed in the Indian industry today."
He goes on to say, "As such, there is no threat of outsourcing harming Indian players, but in fact the contrary. The expertise gathered through this exercise, combined with increased revenue inflow, will enable Indian players to further invest in R&D — both for the generics and innovative segment. Thus, outsourcing will only help boost the 'innovation processes in India'."
Therapeutically growth driven
Jindal tries to explain therapeutics growth move, “The result of lifestyle modification in developed nations is evident with increasing risk of cardiovascular, metabolic and psychic disorders. These areas can be considered as thrust areas for Indian contract manufactures. There are certain therapeutic areas like cytotoxics, beta-lactam antibiotics, sex hormones, immuno-suppressants and aerosols whereas in western world it would like to preferably outsource the manufacturing facilities for drug products and APIs due to environmental and safety issues. The low cost advantage of Indian manufacturer will attract multinationals for contract manufacturing.” He further highlights that, global projects on HIV/AIDS fetched large contract manufacturing orders for anti-retroviral drugs due to cost advantages. There is absolute necessity for upgradation of existing facilities that should get approved from Western drug regulatory agencies so that there is adequate capacity utilisation. However, new facilities may have to be created in niche areas like cytotoxic, hormonal and pulmonary drug delivery products. In the domestic market, anti-infectives have the highest contribution (19 percent) to the total domestic sales. Cephalosporins, penicillins and quinolones are key drug classes among anti-infectives. Gastrointestinal and cardiac are the second and third largest therapeutic categories, respectively. Oral anti-diabetics and anti-peptic ulcerants are the fastest growing segments under alimentary and metabolism therapeutic categories.
Cholesterol reducers have emerged as a key class of cardiovascular drugs in the last few years. Anti depressants accounted for about 15 per cent of the total revenues of the central nervous system (CNS) segment in 2007-08. Around 40 percent of disease burden globally is contributed by top five therapeutics areas—oncology, cardiology, anti-infectives and diabetes.
Cancer accounts for an estimated 7.6 million deaths globally. The oncology pipeline is the richest in number and potential in value, with a large number of pharma and biotech companies focusing on oncology drugs. About 30 percent of all launches in 2010 are expected to be in oncology. The global oncology drug market is growing at 17 percent annually. Presently, the Indian oncology market is expected to be at US$ 30 million.
"Between 1990 and 2005, a large number of global fine and specialty chemical companies restructured and downsised their operations. The traditionally integrated players in the western world saw merit in focusing on specific aspects of business and outsourcing all non-core areas, manufacturing in particular"
- Mahesh Malneedi
President
Makro Group
"As such, there is no threat of outsourcing harming Indian players, but in fact the contrary. The expertise gathered through this exercise, combined with increased revenue inflow, will enable Indian players to further invest in R&D - both for the generics and innovative segment"
- Dr Kamal K Sharma
Managing Director
Lupin
Recently, Indian companies have been focusing on new emerging areas such as biosimilars, oncology and other such drugs which are considered tough to manufacturer due to their complex nature and high skill required.
Oncology is the largest and one of the fastest growing therapy areas in the country and moreover has the highest number of active investigational new drugs (INDs). Biologics has the third-highest number of active INDs present in the pipeline. India has nascent capability in these areas currently since they require higher investment and highly specialised technology. Indian companies have identified the need to augment its capabilities in oncology and biologics. Currently, India has 200 companies working in the area of biotechnology with an emphasis on vaccines and bio-services. There are over a 100 national research centres in the country that support these activities.
Singla said, "Amongst the many therapeutic areas that might prove extremely profitable for Indian pharma companies anti-diabetic, anti-ulcerants and analgesic drugs are witnessing high growth in demand worldwide, and with many international patents, are completing their term in near future, which will make companies like ours to capitalise upon the vast opportunities. We had foreseen this scenario long back and have been preparing for the same with our expansion plans that include increase in production of Ibuprofen and setting up new plants for the production of proton pump inhibitors (PPIs), which will commence commercial production soon."
India is already one of the top players in global generic pharma industry. In order to sustain this position and be ahead in race, there is a need for constant investment in R&D. Indian domestic market is also steeply growing and hence pharma manufacturing in India may have better future than present day scenario.
Manufacturing capabilities
Presently, India accounts eight percent of the global pharma production activity making it the world's fourth-largest pharma producer. Around 64 percent of the total outsourcing is constituted by active pharmaceutical ingredients (APIs), wherein the country is ranked the third-largest player worldwide with 500 different APIs. Indian has a well established manufacturing base in formulations where it manufactures 60,000 packs across 60 therapy areas. The size of Indian pharma industries has been reported as $17 billion in 2007-08 with export consisting of nearly 52 percent of total market. In India, approximately 270 research based pharma companies and 8,000 small generic companies make a highly competitive market that produces high quality medicines at low cost than any other country.
Mahesh Malneedi, President, Makro Group, shares his views on the development of CMOs in India, "Between 1990 and 2005, a large number of global fine and specialty chemical companies restructured and downsized their operations. The traditionally integrated players in the Western world saw merit in focusing on specific aspects of business and outsourcing all non-core areas, manufacturing in particular. This opened up new avenues for many traditional Indian pharma companies with under-utilised capacities and expertise. Consequently, in the late 1990's, contract manufacturing activity jumped, though growth has slowed subsequently. More recently, India has emerged as an alternative research base for global pharma companies."
Driving competition
Though India is already established as a low-cost manufacturing base with significant technical and manpower capability driving its growth, it is important to realise that 80 percent of the industry is still based out of Europe and US and they would continue to pose a challenge for India. In addition, China has also been investing in building capability and will influence India's standing, in the medium/long term. Jindal says, "We need to upgrade our existing manufacturing facilities to the international standard. A number of facilities need upgradation both software and hardware to meet cGMP requirements of regulated markets. New facilities may be created in niche areas like oncology, hormone and pulmonary drug delivery products."
Setting up new facilities due to the above reasons can lead to superior returns on investments because of capital efficiency of Indian companiesas it offers attractive returns to Indian companies as they are able to reduce the up-front capital cost of setting up a project by as much as 25-50 percent due to access to locally fabricated equipment and high-quality local technology or engineering skills. Indian companies have been able to establish US FDA standard plants at approximately 50 percent lower capital costs as compared to US or Europe based manufacturing units.
Lower costs of production: The basic production cost in India is up to 50 per cent lower than that in the US there is 30 to 50 per cent lower depreciation,
FDA approved plants can be constructed in India for 30 percent to 50 per cent lower costs, leading to higher utilisation of equipment due to improved processes. There is 85 to 90 per cent manpower cost savings, and all savings are applicable across all hierarchal levels (eg, operators, research scientists, etc), and improved, more efficient processes contribute to lower labour costs per unit.
There is also 40 to 50 per cent savings in raw materials as bulk drugs can be manufactured in-house at 40 to 50 per cent of ethical cost, excipients and intermediates can be sourced locally at 20-30 per cent lower costs, and most other raw materials can be sourced internally and from China.
Looking ahead
Gupta avers, "In my view the Indian pharma manufacturing companies need to do the following to retain their position in the global pharma market namely—continuous upgradation of existing facilities, continuous training of the manpower, innovation in processes and technology, take advantage of economies of scale by creating optimal size capacities and continue with M&A activities across borders.
Nikunj Kanakia, CMD, Lifeline Industries speaks on the same line, "We should create facilities that are world class and meet global standards, in line with international regulatory norms like the US FDA, Australian-TGA, UK MCA, and EMEA. Today, there are a number of Indian pharma companies who are geared to meet these standards. Also, Government policy should be favourable to industry. Indian pharma companies should lay more and more emphasis on quality and cost to maintain an advantage globally."
"Indians enjoy an in-depth process understanding, revere se engineering skills, a technological bent of mind, combined with a large untapped talent pool which will further enable Indian players to have a competitive advantage vis-Ã -vis other countries. With global efforts to reduce healthcare costs, we are witnessing increasing instances of global giants outsourcing their R&D operations to India," ends Sharma.
GERMANY'S CHOICE-SPECIAL REPORT
Germany's Choice
By Marko Papic and Peter Zeihan
The situation in Europe is dire.
After years of profligate spending, Greece is becoming overwhelmed. Barring some sort of large-scale bailout program, a Greek debt default at this point is highly likely. At this moment, European Central Bank liquidity efforts are probably the only thing holding back such a default. But these are a stopgap measure that can hold only until more important economies manage to find their feet. And Europe’s problems extend beyond Greece. Fundamentals are so poor across the board that any number of eurozone states quickly could follow Greece down.
And so the rest of the eurozone is watching and waiting nervously while casting occasional glances in the direction of Berlin in hopes the eurozone’s leader and economy-in-chief will do something to make it all go away. To truly understand the depth of the crisis the Europeans face, one must first understand Germany, the only country that can solve it.
Germany’s Trap
The heart of Germany’s problem is that it is insecure and indefensible given its location in the middle of the North European Plain. No natural barriers separate Germany from the neighbors to its east and west, no mountains, deserts, oceans. Germany thus lacks strategic depth. The North European Plain is the Continent’s highway for commerce and conquest. Germany’s position in the center of the plain gives it plenty of commercial opportunities but also forces it to participate vigorously in conflict as both an instigator and victim.
Germany’s exposure and vulnerability thus make it an extremely active power. It is always under the gun, and so its policies reflect a certain desperate hyperactivity. In times of peace, Germany is competing with everyone economically, while in times of war it is fighting everyone. Its only hope for survival lies in brutal efficiencies, which it achieves in industry and warfare.
Pre-1945, Germany’s national goals were simple: Use diplomacy and economic heft to prevent multifront wars, and when those wars seem unavoidable, initiate them at a time and place of Berlin’s choosing.
“Success” for Germany proved hard to come by, because challenges to Germany’s security do not “simply” end with the conquest of both France and Poland. An overstretched Germany must then occupy countries with populations in excess of its own while searching for a way to deal with Russia on land and the United Kingdom on the sea. A secure position has always proved impossible, and no matter how efficient, Germany always has fallen ultimately.
During the early Cold War years, Germany’s neighbors tried a new approach. In part, the European Union and NATO are attempts by Germany’s neighbors to grant Germany security on the theory that if everyone in the immediate neighborhood is part of the same club, Germany won’t need a Wehrmacht.
There are catches, of course — most notably that even a demilitarized Germany still is Germany. Even after its disastrous defeats in the first half of the 20th century, Germany remains Europe’s largest state in terms of population and economic size; the frantic mindset that drove the Germans so hard before 1948 didn’t simply disappear. Instead of German energies being split between growth and defense, a demilitarized Germany could — indeed, it had to — focus all its power on economic development. The result was modern Germany — one of the richest, most technologically and industrially advanced states in human history.
Germany and Modern Europe
That gives Germany an entirely different sort of power from the kind it enjoyed via a potent Wehrmacht, and this was not a power that went unnoticed or unused.
France under Charles de Gaulle realized it could not play at the Great Power table with the United States and Soviet Union. Even without the damage from the war and occupation, France simply lacked the population, economy and geographic placement to compete. But a divided Germany offered France an opportunity. Much of the economic dynamism of France’s rival remained, but under postwar arrangements, Germany essentially saw itself stripped of any opinion on matters of foreign policy. So de Gaulle’s plan was a simple one: use German economic strength as sort of a booster seat to enhance France’s global stature.
This arrangement lasted for the next 60 years. The Germans paid for EU social stability throughout the Cold War, providing the bulk of payments into the EU system and never once being a net beneficiary of EU largesse. When the Cold War ended, Germany shouldered the entire cost of German reunification while maintaining its payments to the European Union. When the time came for the monetary union to form, the deutschemark formed the euro’s bedrock. Many a deutschmark was spent defending the weaker European currencies during the early days of European exchange-rate mechanisms in the early 1990s. Berlin was repaid for its efforts by many soon-to-be eurozone states that purposely enacted policies devaluing their currencies on the eve of admission so as to lock in a competitive advantage vis-Ã -vis Germany.
But Germany is no longer a passive observer with an open checkbook.
In 2003, the 10-year process of post-Cold War German reunification was completed, and in 2005 Angela Merkel became the first postwar German leader to run a Germany free from the burden of its past sins. Another election in 2009 ended an awkward left-right coalition, and now Germany has a foreign policy neither shackled by internal compromise nor imposed by Germany’s European “partners.”
The Current Crisis
Simply put, Europe faces a financial meltdown.
The crisis is rooted in Europe’s greatest success: the Maastricht Treaty and the monetary union the treaty spawned epitomized by the euro. Everyone participating in the euro won by merging their currencies. Germany received full, direct and currency-risk-free access to the markets of all its euro partners. In the years since, Germany’s brutal efficiency has permitted its exports to increase steadily both as a share of total European consumption and as a share of European exports to the wider world. Conversely, the eurozone’s smaller and/or poorer members gained access to Germany’s low interest rates and high credit rating.
And the last bit is what spawned the current problem.
Most investors assumed that all eurozone economies had the blessing — and if need be, the pocketbook — of the Bundesrepublik. It isn’t difficult to see why. Germany had written large checks for Europe repeatedly in recent memory, including directly intervening in currency markets to prop up its neighbors’ currencies before the euro’s adoption ended the need to coordinate exchange rates. Moreover, an economic union without Germany at its core would have been a pointless exercise.
Investors took a look at the government bonds of Club Med states (a colloquialism for the four European states with a history of relatively spendthrift policies, namely, Portugal, Spain, Italy and Greece), and decided that they liked what they saw so long as those bonds enjoyed the implicit guarantees of the euro. The term in vogue with investors to discuss European states under stress is PIIGS, short for Portugal, Italy, Ireland, Greece and Spain. While Ireland does have a high budget deficit this year, STRATFOR prefers the term Club Med, as we do not see Ireland as part of the problem group. Unlike the other four states, Ireland repeatedly has demonstrated an ability to tame spending, rationalize its budget and grow its economy without financial skullduggery. In fact, the spread between Irish and German bonds narrowed in the early 1980s before Maastricht was even a gleam in the collective European eye, unlike Club Med, whose spreads did not narrow until Maastricht’s negotiation and ratification.
Even though Europe’s troubled economies never actually obeyed Maastricht’s fiscal rules — Athens was even found out to have falsified statistics to qualify for euro membership — the price to these states of borrowing kept dropping. In fact, one could well argue that the reason Club Med never got its fiscal politics in order was precisely because issuing debt under the euro became cheaper. By 2002 the borrowing costs for Club Med had dropped to within a whisker of those of rock-solid Germany. Years of unmitigated credit binging followed.
The 2008-2009 global recession tightened credit and made investors much more sensitive to national macroeconomic indicators, first in emerging markets of Europe and then in the eurozone. Some investors decided actually to read the EU treaty, where they learned that there is in fact no German bailout at the end of the rainbow, and that Article 104 of the Maastricht Treaty (and Article 21 of the Statute establishing the European Central Bank) actually forbids one explicitly. They further discovered that Greece now boasts a budget deficit and national debt that compares unfavorably with other defaulted states of the past such as Argentina.
Investors now are (belatedly) applying due diligence to investment decisions, and the spread on European bonds — the difference between what German borrowers have to pay versus other borrowers — is widening for the first time since Maastricht’s ratification and doing so with a lethal rapidity. Meanwhile, the European Commission is working to reassure investors that panic is unwarranted, but Athens’ efforts to rein in spending do not inspire confidence. Strikes and other forms of political instability already are providing ample evidence that what weak austerity plans are in place may not be implemented, making additional credit downgrades a foregone conclusion.
Germany’s Choice
As the EU’s largest economy and main architect of the European Central Bank, Germany is where the proverbial buck stops. Germany has a choice to make.
The first option, letting the chips fall where they may, must be tempting to Berlin. After being treated as Europe’s slush fund for 60 years, the Germans must be itching simply to let Greece and others fail. Should the markets truly believe that Germany is not going to ride to the rescue, the spread on Greek debt would expand massively. Remember that despite all the problems in recent weeks, Greek debt currently trades at a spread that is only one-eighth the gap of what it was pre-Maastricht — meaning there is a lot of room for things to get worse. With Greece now facing a budget deficit of at least 9.1 percent in 2010 — and given Greek proclivity to fudge statistics the real figure is probably much worse — any sharp increase in debt servicing costs could push Athens over the brink.
From the perspective of German finances, letting Greece fail would be the financially prudent thing to do. The shock of a Greek default undoubtedly would motivate other European states to get their acts together, budget for steeper borrowing costs and ultimately take their futures into their own hands. But Greece would not be the only default. The rest of Club Med is not all that far behind Greece, and budget deficits have exploded across the European Union. Macroeconomic indicators for France and especially Belgium are in only marginally better shape than those of Spain and Italy.
At this point, one could very well say that by some measures the United States is not far behind the eurozone. The difference is the insatiable global appetite for the U.S. dollar, which despite all the conspiracy theories and conventional wisdom of recent years actually increased during the 2008-2009 global recession. Taken with the dollar’s status as the world’s reserve currency and the fact that the United States controls its own monetary policy, Washington has much more room to maneuver than Europe.
Berlin could at this point very well ask why it should care if Greece and Portugal go under. Greece accounts for just 2.6 percent of eurozone gross domestic product. Furthermore, the crisis is not of Berlin’s making. These states all have been coasting on German largesse for years, if not decades, and isn’t it high time that they were forced to sink or swim?
The problem with that logic is that this crisis also is about the future of Europe and Germany’s place in it. Germany knows that the geopolitical writing is on the wall: As powerful as it is, as an individual country (or even partnered with France), Germany does not approach the power of the United States or China and even that of Brazil or Russia further down the line. Berlin feels its relevance on the world stage slipping, something encapsulated by U.S. President Barack Obama’s recent refusal to meet for the traditional EU-U.S. summit. And it feels its economic weight burdened by the incoherence of the eurozone’s political unity and deepening demographic problems.
The only way for Germany to matter is if Europe as a whole matters. If Germany does the economically prudent (and emotionally satisfying) thing and lets Greece fail, it could force some of the rest of the eurozone to shape up and maybe even make the eurozone better off economically in the long run. But this would come at a cost: It would scuttle the euro as a global currency and the European Union as a global player.
Every state to date that has defaulted on its debt and eventually recovered has done so because it controlled its own monetary policy. These states could engage in various (often unorthodox) methods of stimulating their own recovery. Popular methods include, but are hardly limited to, currency devaluations in an attempt to boost exports and printing currency either to pay off debt or fund spending directly. But Greece and the others in the eurozone surrendered their monetary policy to the European Central Bank when they adopted the euro. Unless these states somehow can change decades of bad behavior in a day, the only way out of economic destitution would be for them to leave the eurozone. In essence, letting Greece fail risks hiving off EU states from the euro. Even if the euro — not to mention the EU — survived the shock and humiliation of monetary partition, the concept of a powerful Europe with a political center would vanish. This is especially so given that the strength of the European Union thus far has been measured by the successes of its rehabilitations — most notably of Portugal, Italy, Greece and Spain in the 1980s — where economic-basket case dictatorships and pseudo-democracies transitioned into modern economies.
And this leaves option two: Berlin bails out Athens.
There is no doubt Germany could afford such a bailout, as the Greek economy is only one-tenth of the size of the Germany’s. But the days of no-strings-attached financial assistance from Germany are over. If Germany is going to do this, there will no longer be anything “implied” or “assumed” about German control of the European Central Bank and the eurozone. The control will become reality, and that control will have consequences. For all intents and purposes, Germany will run the fiscal policies of peripheral member states that have proved they are not up to the task of doing so on their own. To accept anything less intrusive would end with Germany becoming responsible for bailing out everyone. After all, who wouldn’t want a condition-free bailout paid for by Germany? And since a euro-wide bailout is beyond Germany’s means, this scenario would end with Germany leading the EU hat-in-hand to the International Monetary Fund for an American/Chinese-funded assistance package. It is possible that the Germans could be gentle and risk such abject humiliation, but it is not likely.
Taking a firmer tack would allow Germany to achieve via the pocketbook what it couldn’t achieve by the sword. But this policy has its own costs. The eurozone as a whole needs to borrow around 2.2 trillion euros in 2010, with Greece needing 53 billion euros simply to make it through the year. Not far behind Greece is Italy, which needs 393 billion euros, Belgium with needs of 89 billion euros and France with needs of yet another 454 billion euros. As such, the premium on Germany is to act — if it is going to act — fast. It needs to get Greece and most likely Portugal wrapped up before crisis of confidence spreads to the really serious countries, where even mighty German’s resources would be overwhelmed.
That is the cost of making Europe “work.” It is also the cost to Germany of leadership that doesn’t come at the end of a gun. So if Germany wants its leadership to mean something outside of Western Europe, it will be forced to pay for that leadership — deeply, repeatedly and very, very soon. But unlike in years past, this time Berlin will want to hold the reins.
"This report is republished with permission of STRATFOR"
By Marko Papic and Peter Zeihan
The situation in Europe is dire.
After years of profligate spending, Greece is becoming overwhelmed. Barring some sort of large-scale bailout program, a Greek debt default at this point is highly likely. At this moment, European Central Bank liquidity efforts are probably the only thing holding back such a default. But these are a stopgap measure that can hold only until more important economies manage to find their feet. And Europe’s problems extend beyond Greece. Fundamentals are so poor across the board that any number of eurozone states quickly could follow Greece down.
And so the rest of the eurozone is watching and waiting nervously while casting occasional glances in the direction of Berlin in hopes the eurozone’s leader and economy-in-chief will do something to make it all go away. To truly understand the depth of the crisis the Europeans face, one must first understand Germany, the only country that can solve it.
Germany’s Trap
The heart of Germany’s problem is that it is insecure and indefensible given its location in the middle of the North European Plain. No natural barriers separate Germany from the neighbors to its east and west, no mountains, deserts, oceans. Germany thus lacks strategic depth. The North European Plain is the Continent’s highway for commerce and conquest. Germany’s position in the center of the plain gives it plenty of commercial opportunities but also forces it to participate vigorously in conflict as both an instigator and victim.
Germany’s exposure and vulnerability thus make it an extremely active power. It is always under the gun, and so its policies reflect a certain desperate hyperactivity. In times of peace, Germany is competing with everyone economically, while in times of war it is fighting everyone. Its only hope for survival lies in brutal efficiencies, which it achieves in industry and warfare.
Pre-1945, Germany’s national goals were simple: Use diplomacy and economic heft to prevent multifront wars, and when those wars seem unavoidable, initiate them at a time and place of Berlin’s choosing.
“Success” for Germany proved hard to come by, because challenges to Germany’s security do not “simply” end with the conquest of both France and Poland. An overstretched Germany must then occupy countries with populations in excess of its own while searching for a way to deal with Russia on land and the United Kingdom on the sea. A secure position has always proved impossible, and no matter how efficient, Germany always has fallen ultimately.
During the early Cold War years, Germany’s neighbors tried a new approach. In part, the European Union and NATO are attempts by Germany’s neighbors to grant Germany security on the theory that if everyone in the immediate neighborhood is part of the same club, Germany won’t need a Wehrmacht.
There are catches, of course — most notably that even a demilitarized Germany still is Germany. Even after its disastrous defeats in the first half of the 20th century, Germany remains Europe’s largest state in terms of population and economic size; the frantic mindset that drove the Germans so hard before 1948 didn’t simply disappear. Instead of German energies being split between growth and defense, a demilitarized Germany could — indeed, it had to — focus all its power on economic development. The result was modern Germany — one of the richest, most technologically and industrially advanced states in human history.
Germany and Modern Europe
That gives Germany an entirely different sort of power from the kind it enjoyed via a potent Wehrmacht, and this was not a power that went unnoticed or unused.
France under Charles de Gaulle realized it could not play at the Great Power table with the United States and Soviet Union. Even without the damage from the war and occupation, France simply lacked the population, economy and geographic placement to compete. But a divided Germany offered France an opportunity. Much of the economic dynamism of France’s rival remained, but under postwar arrangements, Germany essentially saw itself stripped of any opinion on matters of foreign policy. So de Gaulle’s plan was a simple one: use German economic strength as sort of a booster seat to enhance France’s global stature.
This arrangement lasted for the next 60 years. The Germans paid for EU social stability throughout the Cold War, providing the bulk of payments into the EU system and never once being a net beneficiary of EU largesse. When the Cold War ended, Germany shouldered the entire cost of German reunification while maintaining its payments to the European Union. When the time came for the monetary union to form, the deutschemark formed the euro’s bedrock. Many a deutschmark was spent defending the weaker European currencies during the early days of European exchange-rate mechanisms in the early 1990s. Berlin was repaid for its efforts by many soon-to-be eurozone states that purposely enacted policies devaluing their currencies on the eve of admission so as to lock in a competitive advantage vis-Ã -vis Germany.
But Germany is no longer a passive observer with an open checkbook.
In 2003, the 10-year process of post-Cold War German reunification was completed, and in 2005 Angela Merkel became the first postwar German leader to run a Germany free from the burden of its past sins. Another election in 2009 ended an awkward left-right coalition, and now Germany has a foreign policy neither shackled by internal compromise nor imposed by Germany’s European “partners.”
The Current Crisis
Simply put, Europe faces a financial meltdown.
The crisis is rooted in Europe’s greatest success: the Maastricht Treaty and the monetary union the treaty spawned epitomized by the euro. Everyone participating in the euro won by merging their currencies. Germany received full, direct and currency-risk-free access to the markets of all its euro partners. In the years since, Germany’s brutal efficiency has permitted its exports to increase steadily both as a share of total European consumption and as a share of European exports to the wider world. Conversely, the eurozone’s smaller and/or poorer members gained access to Germany’s low interest rates and high credit rating.
And the last bit is what spawned the current problem.
Most investors assumed that all eurozone economies had the blessing — and if need be, the pocketbook — of the Bundesrepublik. It isn’t difficult to see why. Germany had written large checks for Europe repeatedly in recent memory, including directly intervening in currency markets to prop up its neighbors’ currencies before the euro’s adoption ended the need to coordinate exchange rates. Moreover, an economic union without Germany at its core would have been a pointless exercise.
Investors took a look at the government bonds of Club Med states (a colloquialism for the four European states with a history of relatively spendthrift policies, namely, Portugal, Spain, Italy and Greece), and decided that they liked what they saw so long as those bonds enjoyed the implicit guarantees of the euro. The term in vogue with investors to discuss European states under stress is PIIGS, short for Portugal, Italy, Ireland, Greece and Spain. While Ireland does have a high budget deficit this year, STRATFOR prefers the term Club Med, as we do not see Ireland as part of the problem group. Unlike the other four states, Ireland repeatedly has demonstrated an ability to tame spending, rationalize its budget and grow its economy without financial skullduggery. In fact, the spread between Irish and German bonds narrowed in the early 1980s before Maastricht was even a gleam in the collective European eye, unlike Club Med, whose spreads did not narrow until Maastricht’s negotiation and ratification.
Even though Europe’s troubled economies never actually obeyed Maastricht’s fiscal rules — Athens was even found out to have falsified statistics to qualify for euro membership — the price to these states of borrowing kept dropping. In fact, one could well argue that the reason Club Med never got its fiscal politics in order was precisely because issuing debt under the euro became cheaper. By 2002 the borrowing costs for Club Med had dropped to within a whisker of those of rock-solid Germany. Years of unmitigated credit binging followed.
The 2008-2009 global recession tightened credit and made investors much more sensitive to national macroeconomic indicators, first in emerging markets of Europe and then in the eurozone. Some investors decided actually to read the EU treaty, where they learned that there is in fact no German bailout at the end of the rainbow, and that Article 104 of the Maastricht Treaty (and Article 21 of the Statute establishing the European Central Bank) actually forbids one explicitly. They further discovered that Greece now boasts a budget deficit and national debt that compares unfavorably with other defaulted states of the past such as Argentina.
Investors now are (belatedly) applying due diligence to investment decisions, and the spread on European bonds — the difference between what German borrowers have to pay versus other borrowers — is widening for the first time since Maastricht’s ratification and doing so with a lethal rapidity. Meanwhile, the European Commission is working to reassure investors that panic is unwarranted, but Athens’ efforts to rein in spending do not inspire confidence. Strikes and other forms of political instability already are providing ample evidence that what weak austerity plans are in place may not be implemented, making additional credit downgrades a foregone conclusion.
Germany’s Choice
As the EU’s largest economy and main architect of the European Central Bank, Germany is where the proverbial buck stops. Germany has a choice to make.
The first option, letting the chips fall where they may, must be tempting to Berlin. After being treated as Europe’s slush fund for 60 years, the Germans must be itching simply to let Greece and others fail. Should the markets truly believe that Germany is not going to ride to the rescue, the spread on Greek debt would expand massively. Remember that despite all the problems in recent weeks, Greek debt currently trades at a spread that is only one-eighth the gap of what it was pre-Maastricht — meaning there is a lot of room for things to get worse. With Greece now facing a budget deficit of at least 9.1 percent in 2010 — and given Greek proclivity to fudge statistics the real figure is probably much worse — any sharp increase in debt servicing costs could push Athens over the brink.
From the perspective of German finances, letting Greece fail would be the financially prudent thing to do. The shock of a Greek default undoubtedly would motivate other European states to get their acts together, budget for steeper borrowing costs and ultimately take their futures into their own hands. But Greece would not be the only default. The rest of Club Med is not all that far behind Greece, and budget deficits have exploded across the European Union. Macroeconomic indicators for France and especially Belgium are in only marginally better shape than those of Spain and Italy.
At this point, one could very well say that by some measures the United States is not far behind the eurozone. The difference is the insatiable global appetite for the U.S. dollar, which despite all the conspiracy theories and conventional wisdom of recent years actually increased during the 2008-2009 global recession. Taken with the dollar’s status as the world’s reserve currency and the fact that the United States controls its own monetary policy, Washington has much more room to maneuver than Europe.
Berlin could at this point very well ask why it should care if Greece and Portugal go under. Greece accounts for just 2.6 percent of eurozone gross domestic product. Furthermore, the crisis is not of Berlin’s making. These states all have been coasting on German largesse for years, if not decades, and isn’t it high time that they were forced to sink or swim?
The problem with that logic is that this crisis also is about the future of Europe and Germany’s place in it. Germany knows that the geopolitical writing is on the wall: As powerful as it is, as an individual country (or even partnered with France), Germany does not approach the power of the United States or China and even that of Brazil or Russia further down the line. Berlin feels its relevance on the world stage slipping, something encapsulated by U.S. President Barack Obama’s recent refusal to meet for the traditional EU-U.S. summit. And it feels its economic weight burdened by the incoherence of the eurozone’s political unity and deepening demographic problems.
The only way for Germany to matter is if Europe as a whole matters. If Germany does the economically prudent (and emotionally satisfying) thing and lets Greece fail, it could force some of the rest of the eurozone to shape up and maybe even make the eurozone better off economically in the long run. But this would come at a cost: It would scuttle the euro as a global currency and the European Union as a global player.
Every state to date that has defaulted on its debt and eventually recovered has done so because it controlled its own monetary policy. These states could engage in various (often unorthodox) methods of stimulating their own recovery. Popular methods include, but are hardly limited to, currency devaluations in an attempt to boost exports and printing currency either to pay off debt or fund spending directly. But Greece and the others in the eurozone surrendered their monetary policy to the European Central Bank when they adopted the euro. Unless these states somehow can change decades of bad behavior in a day, the only way out of economic destitution would be for them to leave the eurozone. In essence, letting Greece fail risks hiving off EU states from the euro. Even if the euro — not to mention the EU — survived the shock and humiliation of monetary partition, the concept of a powerful Europe with a political center would vanish. This is especially so given that the strength of the European Union thus far has been measured by the successes of its rehabilitations — most notably of Portugal, Italy, Greece and Spain in the 1980s — where economic-basket case dictatorships and pseudo-democracies transitioned into modern economies.
And this leaves option two: Berlin bails out Athens.
There is no doubt Germany could afford such a bailout, as the Greek economy is only one-tenth of the size of the Germany’s. But the days of no-strings-attached financial assistance from Germany are over. If Germany is going to do this, there will no longer be anything “implied” or “assumed” about German control of the European Central Bank and the eurozone. The control will become reality, and that control will have consequences. For all intents and purposes, Germany will run the fiscal policies of peripheral member states that have proved they are not up to the task of doing so on their own. To accept anything less intrusive would end with Germany becoming responsible for bailing out everyone. After all, who wouldn’t want a condition-free bailout paid for by Germany? And since a euro-wide bailout is beyond Germany’s means, this scenario would end with Germany leading the EU hat-in-hand to the International Monetary Fund for an American/Chinese-funded assistance package. It is possible that the Germans could be gentle and risk such abject humiliation, but it is not likely.
Taking a firmer tack would allow Germany to achieve via the pocketbook what it couldn’t achieve by the sword. But this policy has its own costs. The eurozone as a whole needs to borrow around 2.2 trillion euros in 2010, with Greece needing 53 billion euros simply to make it through the year. Not far behind Greece is Italy, which needs 393 billion euros, Belgium with needs of 89 billion euros and France with needs of yet another 454 billion euros. As such, the premium on Germany is to act — if it is going to act — fast. It needs to get Greece and most likely Portugal wrapped up before crisis of confidence spreads to the really serious countries, where even mighty German’s resources would be overwhelmed.
That is the cost of making Europe “work.” It is also the cost to Germany of leadership that doesn’t come at the end of a gun. So if Germany wants its leadership to mean something outside of Western Europe, it will be forced to pay for that leadership — deeply, repeatedly and very, very soon. But unlike in years past, this time Berlin will want to hold the reins.
"This report is republished with permission of STRATFOR"
Mr. P. D. Rai, MP, Sikkim Visits IIM Shilong
(B.Tech (IIT-Kanpur), PGDBM (IIM-A), the next destination normally expected is some Investment Bank but not for this person who is currently an MP from Sikkim, a person worth emulating - Mr. P. D. Rai paid a visit to IIM Shillong and gave an enthralling and inspiring speech to the participants which was followed by a short Q&A session.)
Encouraging the participants to devote their time and energy towards the country was the essence of his speech. He talked at length about his experience during his political years and showed his concern towards the entry barriers in politics. He said that India has been deprived of some great leaders because when the engine of growth started working, people started to pick the fruits. Mr. P. D. Rai joined politics in 1994 and became M.P. in 2009 emphasizing the quality of perseverance and patience normally found lacking in youngsters these days. He accepted that politics is a difficult ground field for a business oriented mind. There are a lot of uncertainties due to numerous variables that are present while dealing with people. For the same reasons he accepts interns under him so that they can see what makes a politician tick.
In reply to a question about the role of media he focused on the dependency of the politics and media and said that both are married to each other and it's not possible for either of them to survive without each other. In his opinion there are umpteen good things happening as well but they remain unnoticed. When a question about the inefficiency of the government was raised he defended the government saying that it is not apt to expect each and everything from the government's side when the citizens themselves are not responsible enough. He asked everyone to remember that even the ministers have just 24 hours in a day and that the government can't control all the variables in the society simultaneously.
There was also a discussion about the role of microfinance institutions in the development of the backward regions. Concluding the speech he urged the participants of IIM Shillong to actively participate in the development of the North-East region and become the brand ambassadors of the region not just in the country but also in the whole world.
coolavenues.com
(B.Tech (IIT-Kanpur), PGDBM (IIM-A), the next destination normally expected is some Investment Bank but not for this person who is currently an MP from Sikkim, a person worth emulating - Mr. P. D. Rai paid a visit to IIM Shillong and gave an enthralling and inspiring speech to the participants which was followed by a short Q&A session.)
Encouraging the participants to devote their time and energy towards the country was the essence of his speech. He talked at length about his experience during his political years and showed his concern towards the entry barriers in politics. He said that India has been deprived of some great leaders because when the engine of growth started working, people started to pick the fruits. Mr. P. D. Rai joined politics in 1994 and became M.P. in 2009 emphasizing the quality of perseverance and patience normally found lacking in youngsters these days. He accepted that politics is a difficult ground field for a business oriented mind. There are a lot of uncertainties due to numerous variables that are present while dealing with people. For the same reasons he accepts interns under him so that they can see what makes a politician tick.
In reply to a question about the role of media he focused on the dependency of the politics and media and said that both are married to each other and it's not possible for either of them to survive without each other. In his opinion there are umpteen good things happening as well but they remain unnoticed. When a question about the inefficiency of the government was raised he defended the government saying that it is not apt to expect each and everything from the government's side when the citizens themselves are not responsible enough. He asked everyone to remember that even the ministers have just 24 hours in a day and that the government can't control all the variables in the society simultaneously.
There was also a discussion about the role of microfinance institutions in the development of the backward regions. Concluding the speech he urged the participants of IIM Shillong to actively participate in the development of the North-East region and become the brand ambassadors of the region not just in the country but also in the whole world.
coolavenues.com
25,000 crores Pharma Prodction from Excise Free States of India
Loss of Rs.1000 crores annualy to central exchequer.
Sohini Das / Ahmedabad February 09, 2010, 0:40 IST
Gujarat could attract fresh investment worth Rs 5,000 crore in the pharmaceuticals sector, if the excise on pharma products, currently 4 per cent, was removed, the Gujarat wing of the Indian Drug Manufacturers' Association (IDMA) believes.
“Currently, nearly 60 per cent of the net pharma production in the country, amounting to around Rs 25,000 crore, is from the excise-free zones, and small and medium players in the state are the worst-hit,” said Kamlesh Patel, chairman, IDMA, Gujarat State Board.
There are four such tax havens in the country — Sikkim, Himachal Pradesh, Jammu & Kashmir and Uttarakhand — he added.
There are around 800 pharma manufacturing units in Gujarat, and of this, nearly 70 per cent are SMEs engaged in contract manufacturing for bigger players.
IDMA, which represents the small and medium pharma companies of India, has approached the Centre before the forthcoming Union Budget for 2010-11 for abolition of the 4 per cent excise on pharma products, as nearly 60 per cent of the country’s production comes from excise-free zones.
“This could act as a big boost for SMEs to set up shop here,” Patel said.
While the Vibrant Gujarat Summit of January 2009 attracted nearly Rs 6,000 crore worth investment in the pharma sector, around Rs 600 crore consisted of projects planned by 71 SMEs. However, nothing much has come up on the ground so far.
Industry insiders claimed that most companies are waiting for land from the Gujarat Industrial Development Corporation (GIDC). The net land requirement is estimated at around 1.5 lakh acres.
Gujarat had seen an exodus of many pharmaceutical units to tax-exempted states such as HP, Uttarakhand and Sikkim, as pharma is a cost-sensitive business. The state’s share in national pharma production, once 42 per cent, fell below 20 per cent after the pharma tax-free zones were formed.
“Pharma production in Gujarat is picking up now. We hope that by the end of this year, the state’s share will reach around 35 per cent of national pharmaceutical production,” Chirag Doshi, secretary of IDMA, said.
Loss of Rs.1000 crores annualy to central exchequer.
Sohini Das / Ahmedabad February 09, 2010, 0:40 IST
Gujarat could attract fresh investment worth Rs 5,000 crore in the pharmaceuticals sector, if the excise on pharma products, currently 4 per cent, was removed, the Gujarat wing of the Indian Drug Manufacturers' Association (IDMA) believes.
“Currently, nearly 60 per cent of the net pharma production in the country, amounting to around Rs 25,000 crore, is from the excise-free zones, and small and medium players in the state are the worst-hit,” said Kamlesh Patel, chairman, IDMA, Gujarat State Board.
There are four such tax havens in the country — Sikkim, Himachal Pradesh, Jammu & Kashmir and Uttarakhand — he added.
There are around 800 pharma manufacturing units in Gujarat, and of this, nearly 70 per cent are SMEs engaged in contract manufacturing for bigger players.
IDMA, which represents the small and medium pharma companies of India, has approached the Centre before the forthcoming Union Budget for 2010-11 for abolition of the 4 per cent excise on pharma products, as nearly 60 per cent of the country’s production comes from excise-free zones.
“This could act as a big boost for SMEs to set up shop here,” Patel said.
While the Vibrant Gujarat Summit of January 2009 attracted nearly Rs 6,000 crore worth investment in the pharma sector, around Rs 600 crore consisted of projects planned by 71 SMEs. However, nothing much has come up on the ground so far.
Industry insiders claimed that most companies are waiting for land from the Gujarat Industrial Development Corporation (GIDC). The net land requirement is estimated at around 1.5 lakh acres.
Gujarat had seen an exodus of many pharmaceutical units to tax-exempted states such as HP, Uttarakhand and Sikkim, as pharma is a cost-sensitive business. The state’s share in national pharma production, once 42 per cent, fell below 20 per cent after the pharma tax-free zones were formed.
“Pharma production in Gujarat is picking up now. We hope that by the end of this year, the state’s share will reach around 35 per cent of national pharmaceutical production,” Chirag Doshi, secretary of IDMA, said.
12th North East Region Commonwealth Parliamentary Association Conference.
Smt. Meira Kumar, Honourable Speaker, Lok Sabha inaugurated the twelfth North East Region Commonwealth Parliamentary Association Conference at Shillong on 29th January 2010. While speaking on the occasion, Smt. Meira Kumar said that the North East, throughout its post independence history has been badly affected by the problem of insurgency in one way or the other which has resulted in an adverse impact on the overall development of the region, varying only in degrees between the states in the area.
She also confirmed that the per capital gross state domestic product of the region is significantly lesser than that of the rest of the country. Similarly, the region’s share of road and rail networks as well as energy consumption is also below the national average. She accepted that the literacy rate in the region is higher than the national average, but this has not resulted in a high rate of employment due to the lack of economic and industrial activities in the region.
She also said, “It is the responsibility of the states in the region as well as the nation as a whole to address these developmental challenges. It is crystal clear that the region needs peace before it can realize its full potential and catch up with the rest of the country. We must be able to guarantee security of life and property to the people and create an environment that is conducive to investment, both public and private”.
While referring the Parliamentary Standing Committee Report, focusing on the problem of insurgency in the North East, she said that there is a need for a two – pronged strategy for the region (NE), i.e. dealing with insurgency on one hand and working for development on the other. The committee has recognized the North East insurgency problem as a national problem.
She felt that there is a need to take initiatives to bring those influenced by the cult of violence, into the mainstream of our society. It appeared as if she was advocating for expediting the peace talks. “Every one involved has to realize that violence and democracy can not co-exist. Movements which are instrumental in depriving ordinary citizens of their fundamental rights to life and liberty and undermining development can not claim any place in a democratic society. What this region needs today, more than anything else, is the right atmosphere for development,” said Meira Kumar. The Speaker also called upon everyone in the society to discard violence as a means to achieve political objectives.
The conference was organized on the subject “The impact of insurgency activity in North East India on Socio – Economic Development and its Solution Thereof.” Mr. R. Romawia, Speaker, Mizoram Legislative Assembly felt that military operation alone in crushing insurgency is not a viable option. Rather, we need to win the hearts and minds of the insurgent groups so that they can be convinced that the government is concerned about their problems.
Earlier, Mr. Charles Pyngrope, Speaker, Meghalaya Legislative Assembly, offered his welcome address and said that the conference will build bridges of fellowship among people belonging to diverse, racial, ethnic, cultural and social backgrounds and strengthen Parliamentary institutions in their respective lands, ensure rule of law and basic human rights and fundamental freedom and provide a government responsible for the people.
The delegates from all seven sister states of the North East region and also Sikkim, while talking to this reporter, informed that no new perspective to the solutions of the problem of the region was discussed. Nothing was discussed about cross border terrorism and the need to neutralize the insurgent activities in the neighbouring countries. They said that it is old wine in a new bottle.
The above comment can be substantiated by the words of the Speaker of Sikkim Mr. K. T. Gyaltsen. In his brief speech he reiterated the fact that it was the 12th Annual Conference of the NERCPA and as such talks have been going on for over a decade. The potent question surrounding insurgency and development was placed as such and I quote “Is insurgency behind the lack of development or is development the reason behind insurgency?” Mr. K. T. Gyaltsen raised four very widely spoken of yet untapped aspects of the region namely culture, heritage, natural resources and natural beauty all of which combined lend an edge to the region with regards to tourism but till today apart from Sikkim the edge is being dulled. The Speaker had suggested four ways of dealing with the problem of insurgency. Firstly, he said that the mindset of the people needs to be changed. The mindset has to relate to bringing about an emotional integration of the people. Not only must mainland India reach us but we also must do what we can to reach them. Secondly, human Resource Development and Capacity Building is very essential and the emphasis in this should be on quality education. Thirdly, the Look East Policy had some promises but the lack of human touch was a cause of worry. The point was clear that in making a policy for the region the policy makers should visit the region and then proceed. Indeed we need to be in the field to know the field. Finally, other major hurdles which ought to be overcome are deficits in communication and transport.
While the Speaker of Sikkim acknowledged the fact that his state enjoys peace and as such development is on the fast track under the leadership of the ruling Chief Minister P.K. Chamling, the Speakers from other states could not do so. This in itself says a lot about the impact of insurgency in the North East region of India.
Dr. B. Singh, the Speaker of Manipur also shared his views as to why this problem of insurgency is there in the first place. He believes that poverty is the main cause of insurgency. The next cause is unemployment. Out of a population of 24 lakh in Manipur, 6 lakh people were registered as educated unemployed youth. This is a figure which very startling and it raises a lot of questions about the governments of the past and present both at the state and center levels. Thirdly geography is another aspect which should be understood by the policy makers as ideas implemented in the hilly areas may not be practical or feasible in the plains and vice versa. Finally, a lack of knowledge about opportunities and under developed communications are the major hindrances in getting rid of the menace of insurgency.
The only solution which he could suggest was a ‘time bound determination’ to make sure that the elusive peace in some pockets of the region may not remain so elusive any more.
All in all, there is cause for concern as in the never ending race towards development, a few states of the region have lost track of the cause. After all, life is too short to cling to age old grudges. We must let go of the transgressions of the past for the sake of a more peaceful and prosperous tomorrow.
by Harsh Jhunjhunwala
Smt. Meira Kumar, Honourable Speaker, Lok Sabha inaugurated the twelfth North East Region Commonwealth Parliamentary Association Conference at Shillong on 29th January 2010. While speaking on the occasion, Smt. Meira Kumar said that the North East, throughout its post independence history has been badly affected by the problem of insurgency in one way or the other which has resulted in an adverse impact on the overall development of the region, varying only in degrees between the states in the area.
She also confirmed that the per capital gross state domestic product of the region is significantly lesser than that of the rest of the country. Similarly, the region’s share of road and rail networks as well as energy consumption is also below the national average. She accepted that the literacy rate in the region is higher than the national average, but this has not resulted in a high rate of employment due to the lack of economic and industrial activities in the region.
She also said, “It is the responsibility of the states in the region as well as the nation as a whole to address these developmental challenges. It is crystal clear that the region needs peace before it can realize its full potential and catch up with the rest of the country. We must be able to guarantee security of life and property to the people and create an environment that is conducive to investment, both public and private”.
While referring the Parliamentary Standing Committee Report, focusing on the problem of insurgency in the North East, she said that there is a need for a two – pronged strategy for the region (NE), i.e. dealing with insurgency on one hand and working for development on the other. The committee has recognized the North East insurgency problem as a national problem.
She felt that there is a need to take initiatives to bring those influenced by the cult of violence, into the mainstream of our society. It appeared as if she was advocating for expediting the peace talks. “Every one involved has to realize that violence and democracy can not co-exist. Movements which are instrumental in depriving ordinary citizens of their fundamental rights to life and liberty and undermining development can not claim any place in a democratic society. What this region needs today, more than anything else, is the right atmosphere for development,” said Meira Kumar. The Speaker also called upon everyone in the society to discard violence as a means to achieve political objectives.
The conference was organized on the subject “The impact of insurgency activity in North East India on Socio – Economic Development and its Solution Thereof.” Mr. R. Romawia, Speaker, Mizoram Legislative Assembly felt that military operation alone in crushing insurgency is not a viable option. Rather, we need to win the hearts and minds of the insurgent groups so that they can be convinced that the government is concerned about their problems.
Earlier, Mr. Charles Pyngrope, Speaker, Meghalaya Legislative Assembly, offered his welcome address and said that the conference will build bridges of fellowship among people belonging to diverse, racial, ethnic, cultural and social backgrounds and strengthen Parliamentary institutions in their respective lands, ensure rule of law and basic human rights and fundamental freedom and provide a government responsible for the people.
The delegates from all seven sister states of the North East region and also Sikkim, while talking to this reporter, informed that no new perspective to the solutions of the problem of the region was discussed. Nothing was discussed about cross border terrorism and the need to neutralize the insurgent activities in the neighbouring countries. They said that it is old wine in a new bottle.
The above comment can be substantiated by the words of the Speaker of Sikkim Mr. K. T. Gyaltsen. In his brief speech he reiterated the fact that it was the 12th Annual Conference of the NERCPA and as such talks have been going on for over a decade. The potent question surrounding insurgency and development was placed as such and I quote “Is insurgency behind the lack of development or is development the reason behind insurgency?” Mr. K. T. Gyaltsen raised four very widely spoken of yet untapped aspects of the region namely culture, heritage, natural resources and natural beauty all of which combined lend an edge to the region with regards to tourism but till today apart from Sikkim the edge is being dulled. The Speaker had suggested four ways of dealing with the problem of insurgency. Firstly, he said that the mindset of the people needs to be changed. The mindset has to relate to bringing about an emotional integration of the people. Not only must mainland India reach us but we also must do what we can to reach them. Secondly, human Resource Development and Capacity Building is very essential and the emphasis in this should be on quality education. Thirdly, the Look East Policy had some promises but the lack of human touch was a cause of worry. The point was clear that in making a policy for the region the policy makers should visit the region and then proceed. Indeed we need to be in the field to know the field. Finally, other major hurdles which ought to be overcome are deficits in communication and transport.
While the Speaker of Sikkim acknowledged the fact that his state enjoys peace and as such development is on the fast track under the leadership of the ruling Chief Minister P.K. Chamling, the Speakers from other states could not do so. This in itself says a lot about the impact of insurgency in the North East region of India.
Dr. B. Singh, the Speaker of Manipur also shared his views as to why this problem of insurgency is there in the first place. He believes that poverty is the main cause of insurgency. The next cause is unemployment. Out of a population of 24 lakh in Manipur, 6 lakh people were registered as educated unemployed youth. This is a figure which very startling and it raises a lot of questions about the governments of the past and present both at the state and center levels. Thirdly geography is another aspect which should be understood by the policy makers as ideas implemented in the hilly areas may not be practical or feasible in the plains and vice versa. Finally, a lack of knowledge about opportunities and under developed communications are the major hindrances in getting rid of the menace of insurgency.
The only solution which he could suggest was a ‘time bound determination’ to make sure that the elusive peace in some pockets of the region may not remain so elusive any more.
All in all, there is cause for concern as in the never ending race towards development, a few states of the region have lost track of the cause. After all, life is too short to cling to age old grudges. We must let go of the transgressions of the past for the sake of a more peaceful and prosperous tomorrow.
by Harsh Jhunjhunwala
Underground UGRF leader arrested in Sikkim
Gangtok, Feb 9 (PTI) Police today arrested Ajay Dahal, founder leader of underground militant outfit United Gorkha Revolutionary Front (UGRF), a senior police official said.
Acting on a tip off, a police team intercepted a vehicle on way to Rumtek and caught Dahal and recovered one .9MM country-made pistol, three live ammunition and a fake identity card of CISF, Inspector General of Police, (Law and Order), S D Negi told PTI here.
Dahal had been charged under the provisions of the Arms Act, he said, adding he was being grilled by a police team to elicit information about his underground activities and the motive behind his stay in Sikkim.
The IG said that Dahal had been staying in Sikkim for the past few days and coordinating the activities of his outfit.
The UGRF leader has been demanding for the creation of a separate Gorkhaland.
Gangtok, Feb 9 (PTI) Police today arrested Ajay Dahal, founder leader of underground militant outfit United Gorkha Revolutionary Front (UGRF), a senior police official said.
Acting on a tip off, a police team intercepted a vehicle on way to Rumtek and caught Dahal and recovered one .9MM country-made pistol, three live ammunition and a fake identity card of CISF, Inspector General of Police, (Law and Order), S D Negi told PTI here.
Dahal had been charged under the provisions of the Arms Act, he said, adding he was being grilled by a police team to elicit information about his underground activities and the motive behind his stay in Sikkim.
The IG said that Dahal had been staying in Sikkim for the past few days and coordinating the activities of his outfit.
The UGRF leader has been demanding for the creation of a separate Gorkhaland.
Tuesday, February 9, 2010
India: Kantilal Bhuria inaugurates
The Minister of Tribal Affairs, Shri Kantilal Bhuria inaugurated "Prakriti", National Festival of Tribal Dances & Music here today. The festival has been organized by the Ministry of Tribal Affairs in collaboration with the Ministry of Culture from 5th to 7th February, 2010 in New Delhi at Dilli Haat.
Prakriti – the integrated event, is a joint initiative of the Ministry of Tribal Affairs, Tribal Co-operative Marketing Development Federatioon of India Limited (TRIFED) and the Ministry of Culture to present tribal art and culture in a holistic manner. Ministry of Culture brings in performing tribal troupes from different parts of the country to make the event a unique blend of tribal art and culture.
Tribal Dances being presented in Prakriti give glimpses of various art forms. These will include some of the well-known tribal dances like Karma Dance, Uttar Pradesh; Gendi Dance, Chhattisgarh; Mangalamkali Dance, Kerala; Korku Dance, Madhya Pradesh; Pangwali Dance, Himachal Pradesh; Gavari, Rajasthan; Gagan-Ngai Dance, Nagaland and others .
An exhibition of selected photographs of the 3rd level thematic Photo contest 2009 on ‘Tribal Portraits’ was also held for which the awards were distributed to the Winners of the competition later.
Shri Abhijit Bhattacharyya of Kolkata has bagged the First prize in the Third National Level Photo Contest for his picture “Mokree” on a particular theme “Tribal Portrait” organized jointly by Ministry of Tribal Affairs and the Photo Division, Ministry of Information and Broadcasting. The Second prize went to Shri Writwik Chakraborty of Nadia of West Bengal for his picture title “Old Age” and the third prize went to Shri K. Nageswara Rao of Guntur, Andhra Pradesh for his picture titled “Thinking for Bright Future”. The Commendation award went to Shri Partha Pratim Saha, Shri Sandipan Majumdar, Shri Shyamal Das, Shri Nimai Chandra Ghosh, Shri Somenath Mukhopadhyay, Shri Sugato Mukherjee, Shri Amit Basu of Kolkata, Shri Vanam Paparao, Shri Guntaka Gopala Reddy of Andhra Pradesh. Shri G. Nagasrinivasu of Trivandrum has been conferred with a Special Commendation Award as Tribal Photographer for his picture “Bonda Tribal Gandma”.
The First prize includes Rs. 25,000/- as well as a memento and a citation, the Second prize of Rs. 15,000/- and the third prize Rs. 10,000/- and Commendation award of Rs. 2,000/- with a memento and a citation. The Jury could not find suitable photograph for giving the Special Talent Award for the best Tribal photographer as the Jury did not find such picture for the award. However, a Commendation award was given to one Tribal Photographer. A total number of 146 photographers from 20 states sent 927 photographs which includes Andhra Pradesh, Assam, Bihar, Chhattisgarh, Dadra & Nagar Haveli, Delhi, Gujarat, Haryana, Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Mizoram, Orissa, Rajasthan, Tamilnadu, Uttar Pradesh and West Bengal.
A high level Jury comprising of Shri G.B. Mukherji, Secretary, Tribal Affairs, himself a noted photographer along with an eminent tribal photographer Shri Michael Shylla from Meghalaya selected the13 award winning photographs and 88 photographs for exhibition.
**
The Minister of Tribal Affairs, Shri Kantilal Bhuria inaugurated "Prakriti", National Festival of Tribal Dances & Music here today. The festival has been organized by the Ministry of Tribal Affairs in collaboration with the Ministry of Culture from 5th to 7th February, 2010 in New Delhi at Dilli Haat.
Prakriti – the integrated event, is a joint initiative of the Ministry of Tribal Affairs, Tribal Co-operative Marketing Development Federatioon of India Limited (TRIFED) and the Ministry of Culture to present tribal art and culture in a holistic manner. Ministry of Culture brings in performing tribal troupes from different parts of the country to make the event a unique blend of tribal art and culture.
Tribal Dances being presented in Prakriti give glimpses of various art forms. These will include some of the well-known tribal dances like Karma Dance, Uttar Pradesh; Gendi Dance, Chhattisgarh; Mangalamkali Dance, Kerala; Korku Dance, Madhya Pradesh; Pangwali Dance, Himachal Pradesh; Gavari, Rajasthan; Gagan-Ngai Dance, Nagaland and others .
An exhibition of selected photographs of the 3rd level thematic Photo contest 2009 on ‘Tribal Portraits’ was also held for which the awards were distributed to the Winners of the competition later.
Shri Abhijit Bhattacharyya of Kolkata has bagged the First prize in the Third National Level Photo Contest for his picture “Mokree” on a particular theme “Tribal Portrait” organized jointly by Ministry of Tribal Affairs and the Photo Division, Ministry of Information and Broadcasting. The Second prize went to Shri Writwik Chakraborty of Nadia of West Bengal for his picture title “Old Age” and the third prize went to Shri K. Nageswara Rao of Guntur, Andhra Pradesh for his picture titled “Thinking for Bright Future”. The Commendation award went to Shri Partha Pratim Saha, Shri Sandipan Majumdar, Shri Shyamal Das, Shri Nimai Chandra Ghosh, Shri Somenath Mukhopadhyay, Shri Sugato Mukherjee, Shri Amit Basu of Kolkata, Shri Vanam Paparao, Shri Guntaka Gopala Reddy of Andhra Pradesh. Shri G. Nagasrinivasu of Trivandrum has been conferred with a Special Commendation Award as Tribal Photographer for his picture “Bonda Tribal Gandma”.
The First prize includes Rs. 25,000/- as well as a memento and a citation, the Second prize of Rs. 15,000/- and the third prize Rs. 10,000/- and Commendation award of Rs. 2,000/- with a memento and a citation. The Jury could not find suitable photograph for giving the Special Talent Award for the best Tribal photographer as the Jury did not find such picture for the award. However, a Commendation award was given to one Tribal Photographer. A total number of 146 photographers from 20 states sent 927 photographs which includes Andhra Pradesh, Assam, Bihar, Chhattisgarh, Dadra & Nagar Haveli, Delhi, Gujarat, Haryana, Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Mizoram, Orissa, Rajasthan, Tamilnadu, Uttar Pradesh and West Bengal.
A high level Jury comprising of Shri G.B. Mukherji, Secretary, Tribal Affairs, himself a noted photographer along with an eminent tribal photographer Shri Michael Shylla from Meghalaya selected the13 award winning photographs and 88 photographs for exhibition.
**
Rotary International Honours Shri Azad as Champion in Worldwide Efforts to Eradicate Polio
The Union Minister of Health and Family welfare Shri Ghulam Nabi Azad was Honoured by Rotary International as Polio Champion for his untiring efforts to eradicate the disease from the country. Shri Azad was presented the award at a function here today at New Delhi where he launched the National Immunization day for polio. This immunization day will see launch of bivalent vaccine in Uttar Pradesh and Delhi. The bi-valent vaccine was launched in Bihar last month to tackle the disease in focus areas. About 42 million kids will get the new drops. Overall 170 million children are likely to be immunized in this round of NID. “ We are committed to eradicate the polio menace from the country and focussed efforts will definitely bring desired results with the introduction of Bivalent vaccine in UP, Delhi and Bihar” Shri Azad said.
The Polio Champion Award is given by Rotary International since 1995 to recognize governments and world leaders who have made outstanding contributions toward the goal of eradicating polio. Other leaders who have been honoured with Rotary’s Polio Eradication Champion Award include Angela Merkel, Chancellor of Germany, former Prime Minister John Howard of Australia; former Prime Minister Tony Blair of Great Britain; Alpha Oumar Konare, former chair of the African Union Commission; former Prime Minister Junichiro Koizumi of Japan; Prime Minister Manmohan Singh of India; President Yar’Adua of Nigeria; former President Bill Clinton of the United States; former UN Secretary-General Kofi Annan; President Mamadou Tandja of Niger; Secretary General Ban-Ki-Moon.
There are three strains of wild polio virus, viz P1, P2 & P3. Type 2 wild polio virus (P2) has been eliminated in the year 1999. Efforts are being made to eradicate P1 and P3 also. As P1 is the more virulent type of the two, the current strategy is to eliminate it first while keeping P3 under control. Once P1 is eradicated, efforts to eradicate P3 will be made. Initially trivalent Oral Polio Vaccine (which caters to all the three strains of wild polio virus) was used in the campaign. Subsequently, more efficacious monovalent vaccine was introduced in the programme to handle the type 1 and type3 wild polio virus. While the monovalent vaccine has been found to be effective in containing the transmission of P1, it has affected the control of transmission of P3 getting compromised. Recently a bivalent vaccine has been developed which will control P1 and P3 simultaneously. This vaccine is being introduced in UP and Delhi from today and it was introduced in Bihar last month.
Pulse polio programme was started in the year 1995 with the objective to eradicate poliomyelitis. Prior to starting the campaign, the number of paralytic cases due to polio was in the range of approximately 50000 every year. A drive against wild polio virus by organizing pulse polio campaign has seen a drastic reduction in the number of paralytic cases due to polio and it has been limited to a few hundreds now.
33 States / UTs are now free of indigenous transmission of wild polio virus. Only UP and Bihar remain the two endemic States in the country for wild polio virus where the indigenous transmission is still continuing. A multi pronged approach is being adopted where on the one hand efforts are being made to vaccinate each and every child with Oral Polio Vaccine (OPV) and on the other, efforts to ensure sanitation, hygiene and clean drinking water are being ensured.
For the year 2009, 721 cases have been reported so far. Out of these, 641 are wild poliovirus type 3 (WPV3) & 79 are wild poliovirus type 1 (WPV1) & one case is a mixture of both i.e. WPV1 + WPV3.
****
DS
The Union Minister of Health and Family welfare Shri Ghulam Nabi Azad was Honoured by Rotary International as Polio Champion for his untiring efforts to eradicate the disease from the country. Shri Azad was presented the award at a function here today at New Delhi where he launched the National Immunization day for polio. This immunization day will see launch of bivalent vaccine in Uttar Pradesh and Delhi. The bi-valent vaccine was launched in Bihar last month to tackle the disease in focus areas. About 42 million kids will get the new drops. Overall 170 million children are likely to be immunized in this round of NID. “ We are committed to eradicate the polio menace from the country and focussed efforts will definitely bring desired results with the introduction of Bivalent vaccine in UP, Delhi and Bihar” Shri Azad said.
The Polio Champion Award is given by Rotary International since 1995 to recognize governments and world leaders who have made outstanding contributions toward the goal of eradicating polio. Other leaders who have been honoured with Rotary’s Polio Eradication Champion Award include Angela Merkel, Chancellor of Germany, former Prime Minister John Howard of Australia; former Prime Minister Tony Blair of Great Britain; Alpha Oumar Konare, former chair of the African Union Commission; former Prime Minister Junichiro Koizumi of Japan; Prime Minister Manmohan Singh of India; President Yar’Adua of Nigeria; former President Bill Clinton of the United States; former UN Secretary-General Kofi Annan; President Mamadou Tandja of Niger; Secretary General Ban-Ki-Moon.
There are three strains of wild polio virus, viz P1, P2 & P3. Type 2 wild polio virus (P2) has been eliminated in the year 1999. Efforts are being made to eradicate P1 and P3 also. As P1 is the more virulent type of the two, the current strategy is to eliminate it first while keeping P3 under control. Once P1 is eradicated, efforts to eradicate P3 will be made. Initially trivalent Oral Polio Vaccine (which caters to all the three strains of wild polio virus) was used in the campaign. Subsequently, more efficacious monovalent vaccine was introduced in the programme to handle the type 1 and type3 wild polio virus. While the monovalent vaccine has been found to be effective in containing the transmission of P1, it has affected the control of transmission of P3 getting compromised. Recently a bivalent vaccine has been developed which will control P1 and P3 simultaneously. This vaccine is being introduced in UP and Delhi from today and it was introduced in Bihar last month.
Pulse polio programme was started in the year 1995 with the objective to eradicate poliomyelitis. Prior to starting the campaign, the number of paralytic cases due to polio was in the range of approximately 50000 every year. A drive against wild polio virus by organizing pulse polio campaign has seen a drastic reduction in the number of paralytic cases due to polio and it has been limited to a few hundreds now.
33 States / UTs are now free of indigenous transmission of wild polio virus. Only UP and Bihar remain the two endemic States in the country for wild polio virus where the indigenous transmission is still continuing. A multi pronged approach is being adopted where on the one hand efforts are being made to vaccinate each and every child with Oral Polio Vaccine (OPV) and on the other, efforts to ensure sanitation, hygiene and clean drinking water are being ensured.
For the year 2009, 721 cases have been reported so far. Out of these, 641 are wild poliovirus type 3 (WPV3) & 79 are wild poliovirus type 1 (WPV1) & one case is a mixture of both i.e. WPV1 + WPV3.
****
DS
PM ADDRESSES CHIEF MINSTERS’ CONFERENCE ON INTERNAL SECURITY
7 Feb 2010
The Prime Minister, Dr. Manmohan Singh, inaugurated the Chief Ministers’ Conference on Internal Security in New Delhi today. In his address, the Prime Minister called for effective coordination between the Centre and the States to face the challenges of Internal Security. Following is the text of the Prime Minister’s address on the occasion:
“We have gathered here today to discuss issues relating to our internal security, an area that require utmost vigil, sustained and coordinated attention of both the Central and the State governments. We must periodically together review the systems that are in place for ensuring the safety and security of our country and our citizens, assess the threats that we face and take appropriate remedial action to deal with those threats. It is in this spirit that this Conference is being held. I compliment the Home Minister and his team for organizing it and for the good work that they have done in the last one year. I welcome and greet each one of you and I sincerely hope that the deliberations of this Conference will contribute substantively to the strengthening of our internal security.
All of you are aware of the major threats to our security. Hostile groups and elements operate from across the border to perpetrate terrorist acts in our country. The State of Jammu & Kashmir bears the brunt of the acts of these groups. There is insurgency and violence in the North-East. Many States are affected by Left–Wing extremism, which I have in the past referred to as the greatest threat to our internal security. There are also those trying to divide our society on communal and regional lines. Each one of these threats requires a strong effort, determination, hard work and continuous vigilance to tackle. These threats to our society, to our polity and our country constitute a challenge that we must and we shall meet effectively at all costs.
When we met last time in August 2009, I had mentioned the steps we had taken to improve our internal security environment between January and August. These included the setting up of four regional hubs of the National Security Guard at Mumbai, Kolkata, Chennai and Hyderabad and the setting up of the National Investigation Agency. Since then we have made further progress. The Multi Agency Centre (MAC) in the Intelligence Bureau now shares intelligence with other agencies, including those of the State Governments and Union Territories on a continuous and real time basis. Reciprocally, the other agencies are also obliged to share intelligence with the Multi Agency Centre. The Centre operates on a 24 hour basis and I expect that this arrangement for sharing and exchange of information and intelligence will greatly help us not only in apprehending those responsible for acts that vitiate our security environment but also in preventing such acts. I also understand that the Ministry of Home Affairs has initiated action to set up dedicated and secure online connectivity for exchange of real time intelligence and security related information between the Centre and the States. I would urge all Hon’ble Chief Ministers to benefit from these facilities and arrangements.
We have also made progress in some other areas. To enable quick movement of anti-terrorist forces, the Director General of the National Security Guard and certain other designated officers are now empowered to requisition aircraft. The Central Industrial Security Force Act has been amended so that the Force can provide security to establishments and undertakings in the joint and private sectors. The National Investigation Agency has started its work with cases for investigation and prosecution having been assigned to it. It is my expectation that the States would make the fullest possible use of this agency so that our fight against terrorism can be a forceful and united effort.
The terrorist strikes in Mumbai in November 2008 had made us painfully aware of the need to strengthen our coastal security. The National Committee on Coastal security under the chairmanship of the Cabinet Secretary has been constituted to adopt an integrated approach to this very vital issue. The Committee has taken action to increase the level of patrolling and surveillance along the Indian coastline and bring about greater coordination between the various agencies that can contribute to security along our coasts. The issue of multi-purpose identity cards with biometric features to residents in coastal areas is expected to be completed by September 2010. The process of registration of boats and vessels has gathered momentum. Standard operating procedures have been finalized and communicated to the State Government. These and other steps being taken should help substantially in making our coastline safer and secure.
While we have made progress on different fronts, we are also aware that we have a lot more to achieve. I would like to take this opportunity to assure all of you present here that there will be no let up in our commitment and in our efforts. However, our success also depends in large measure on the response of the State Governments. While speaking to Chief Secretaries of States a few days back I had said that many issues in today’s world require a response that is coordinated not only between the affected States but also between the Centre and the States. Internal security is certainly one such issue, and for that matter a critical issue which affects the pace of our growth and development.
Apart from coordinating efforts, there are certain specific steps which the States could take. I would like to take this opportunity to urge the Chief Ministers to create Special Intervention Units in their States to enhance the speed and decisiveness of the Quick Response Teams. The States may also like to develop specialized commando forces which could be deployed to act as a deterrent to terrorist acts. I would urge Chief Ministers to make full use of the scheme formulated by the Central Government to assist the Special Branches of States in strengthening their intelligence capabilities.
A very basic pre-requisite of any internal security system is an adequate number of policemen who are well trained. The problems of inadequate number of policemen and deficiency in training of the police personnel have been underlined time and again. Unfortunately there has not been adequate progress in these areas. The figures collected by the Ministry of Home Affairs show that at the end of September 2009, about three lakh ninety four thousand of the sanctioned posts in the State and Union Territory police forces were lying vacant. This constitutes a large proportion – about 20 percent - of the total sanctioned strength. I would urge State Chief Ministers to take expeditious action to fill these vacant posts. There is also a need to ensure good infrastructure for our police forces to be effective and efficient. At present for all States as a whole, around 80 percent of the police budget is used for salaries, allowances and pensions. The States should increase the proportion of the budget earmarked for police infrastructure and police training. I hope to see greater efforts from States and enhanced allocations in State budgets for recruitment and training of police personnel and for improving the infrastructural facilities available to our police forces. We should also think of special incentives for policemen, and indeed other government officials, posted in difficult areas.
During the course of this Conference, the internal security issues that we face will be discussed in detail. I will only touch upon a few of them. As far as Jammu & Kashmir is concerned, there has been a marked decline in the number of terrorist incidents from 2008 to 2009. But, infiltration levels have shown an increase. Recently there have been some incidents which are disturbing. In the North-East also, the number of incidents has gone down in 2009 as compared to 2008. The number of incidents related to Left-Wing extremism has however increased in the same period, as has the number of civilians and security personnel killed in these incidents. This is worrisome. The Left–Wing extremists continue to target vital installations and kill innocent civilians in Bihar, Chhattisgarh, Jharkhand, Maharashtra, Orissa and West Bengal. The Centre and the States have to find ways and means of jointly fighting this menace. As I have said earlier, our response to Left–Wing extremism must be calibrated to avoid alienating our people, especially those in the tribal areas. It must also go hand in hand with social and economic development of areas affected by Left–Wing extremism, bringing them into the mainstream of national progress. Tribal communities in particular, should get full benefit of our development schemes and development programmes. This is only possible by improving service delivery in tribal dominated areas.
I would also like to make a mention of the menace of counterfeit currency notes. There are indications that Fake Indian Currency Notes are being printed and smuggled into India from outside our country. There is obviously a need for a coordinated approach by the Central and State agencies to tackle this menace; which has serious implications for our economy. In some instances of recovery of fake currency, especially by banks, there has been a reluctance to register the First Information Report. This has to be avoided and all such cases must be thoroughly investigated. The States could also designate a nodal agency to investigate cases of seizure or recovery of Fake Currency Notes and set up a state level committee for continuous vigilance in the matter, as has been suggested by the Ministry of Home Affairs.
We have a hard task ahead but one that can be and must be achieved with determination and coordinated action. As we deliberate upon the serious issues that constitute the agenda of this Conference, it will be in the spirit of strengthening each others’ hands. We will only succeed if we are united as a nation in addressing the concerns related to our internal security. In conclusion, I wish you all the very best in your endeavours and hope that this conference will lead to a better understanding of internal security issues and will also result in more effective responses to the threats we face as a nation.”
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AD/LV/KT
7 Feb 2010
The Prime Minister, Dr. Manmohan Singh, inaugurated the Chief Ministers’ Conference on Internal Security in New Delhi today. In his address, the Prime Minister called for effective coordination between the Centre and the States to face the challenges of Internal Security. Following is the text of the Prime Minister’s address on the occasion:
“We have gathered here today to discuss issues relating to our internal security, an area that require utmost vigil, sustained and coordinated attention of both the Central and the State governments. We must periodically together review the systems that are in place for ensuring the safety and security of our country and our citizens, assess the threats that we face and take appropriate remedial action to deal with those threats. It is in this spirit that this Conference is being held. I compliment the Home Minister and his team for organizing it and for the good work that they have done in the last one year. I welcome and greet each one of you and I sincerely hope that the deliberations of this Conference will contribute substantively to the strengthening of our internal security.
All of you are aware of the major threats to our security. Hostile groups and elements operate from across the border to perpetrate terrorist acts in our country. The State of Jammu & Kashmir bears the brunt of the acts of these groups. There is insurgency and violence in the North-East. Many States are affected by Left–Wing extremism, which I have in the past referred to as the greatest threat to our internal security. There are also those trying to divide our society on communal and regional lines. Each one of these threats requires a strong effort, determination, hard work and continuous vigilance to tackle. These threats to our society, to our polity and our country constitute a challenge that we must and we shall meet effectively at all costs.
When we met last time in August 2009, I had mentioned the steps we had taken to improve our internal security environment between January and August. These included the setting up of four regional hubs of the National Security Guard at Mumbai, Kolkata, Chennai and Hyderabad and the setting up of the National Investigation Agency. Since then we have made further progress. The Multi Agency Centre (MAC) in the Intelligence Bureau now shares intelligence with other agencies, including those of the State Governments and Union Territories on a continuous and real time basis. Reciprocally, the other agencies are also obliged to share intelligence with the Multi Agency Centre. The Centre operates on a 24 hour basis and I expect that this arrangement for sharing and exchange of information and intelligence will greatly help us not only in apprehending those responsible for acts that vitiate our security environment but also in preventing such acts. I also understand that the Ministry of Home Affairs has initiated action to set up dedicated and secure online connectivity for exchange of real time intelligence and security related information between the Centre and the States. I would urge all Hon’ble Chief Ministers to benefit from these facilities and arrangements.
We have also made progress in some other areas. To enable quick movement of anti-terrorist forces, the Director General of the National Security Guard and certain other designated officers are now empowered to requisition aircraft. The Central Industrial Security Force Act has been amended so that the Force can provide security to establishments and undertakings in the joint and private sectors. The National Investigation Agency has started its work with cases for investigation and prosecution having been assigned to it. It is my expectation that the States would make the fullest possible use of this agency so that our fight against terrorism can be a forceful and united effort.
The terrorist strikes in Mumbai in November 2008 had made us painfully aware of the need to strengthen our coastal security. The National Committee on Coastal security under the chairmanship of the Cabinet Secretary has been constituted to adopt an integrated approach to this very vital issue. The Committee has taken action to increase the level of patrolling and surveillance along the Indian coastline and bring about greater coordination between the various agencies that can contribute to security along our coasts. The issue of multi-purpose identity cards with biometric features to residents in coastal areas is expected to be completed by September 2010. The process of registration of boats and vessels has gathered momentum. Standard operating procedures have been finalized and communicated to the State Government. These and other steps being taken should help substantially in making our coastline safer and secure.
While we have made progress on different fronts, we are also aware that we have a lot more to achieve. I would like to take this opportunity to assure all of you present here that there will be no let up in our commitment and in our efforts. However, our success also depends in large measure on the response of the State Governments. While speaking to Chief Secretaries of States a few days back I had said that many issues in today’s world require a response that is coordinated not only between the affected States but also between the Centre and the States. Internal security is certainly one such issue, and for that matter a critical issue which affects the pace of our growth and development.
Apart from coordinating efforts, there are certain specific steps which the States could take. I would like to take this opportunity to urge the Chief Ministers to create Special Intervention Units in their States to enhance the speed and decisiveness of the Quick Response Teams. The States may also like to develop specialized commando forces which could be deployed to act as a deterrent to terrorist acts. I would urge Chief Ministers to make full use of the scheme formulated by the Central Government to assist the Special Branches of States in strengthening their intelligence capabilities.
A very basic pre-requisite of any internal security system is an adequate number of policemen who are well trained. The problems of inadequate number of policemen and deficiency in training of the police personnel have been underlined time and again. Unfortunately there has not been adequate progress in these areas. The figures collected by the Ministry of Home Affairs show that at the end of September 2009, about three lakh ninety four thousand of the sanctioned posts in the State and Union Territory police forces were lying vacant. This constitutes a large proportion – about 20 percent - of the total sanctioned strength. I would urge State Chief Ministers to take expeditious action to fill these vacant posts. There is also a need to ensure good infrastructure for our police forces to be effective and efficient. At present for all States as a whole, around 80 percent of the police budget is used for salaries, allowances and pensions. The States should increase the proportion of the budget earmarked for police infrastructure and police training. I hope to see greater efforts from States and enhanced allocations in State budgets for recruitment and training of police personnel and for improving the infrastructural facilities available to our police forces. We should also think of special incentives for policemen, and indeed other government officials, posted in difficult areas.
During the course of this Conference, the internal security issues that we face will be discussed in detail. I will only touch upon a few of them. As far as Jammu & Kashmir is concerned, there has been a marked decline in the number of terrorist incidents from 2008 to 2009. But, infiltration levels have shown an increase. Recently there have been some incidents which are disturbing. In the North-East also, the number of incidents has gone down in 2009 as compared to 2008. The number of incidents related to Left-Wing extremism has however increased in the same period, as has the number of civilians and security personnel killed in these incidents. This is worrisome. The Left–Wing extremists continue to target vital installations and kill innocent civilians in Bihar, Chhattisgarh, Jharkhand, Maharashtra, Orissa and West Bengal. The Centre and the States have to find ways and means of jointly fighting this menace. As I have said earlier, our response to Left–Wing extremism must be calibrated to avoid alienating our people, especially those in the tribal areas. It must also go hand in hand with social and economic development of areas affected by Left–Wing extremism, bringing them into the mainstream of national progress. Tribal communities in particular, should get full benefit of our development schemes and development programmes. This is only possible by improving service delivery in tribal dominated areas.
I would also like to make a mention of the menace of counterfeit currency notes. There are indications that Fake Indian Currency Notes are being printed and smuggled into India from outside our country. There is obviously a need for a coordinated approach by the Central and State agencies to tackle this menace; which has serious implications for our economy. In some instances of recovery of fake currency, especially by banks, there has been a reluctance to register the First Information Report. This has to be avoided and all such cases must be thoroughly investigated. The States could also designate a nodal agency to investigate cases of seizure or recovery of Fake Currency Notes and set up a state level committee for continuous vigilance in the matter, as has been suggested by the Ministry of Home Affairs.
We have a hard task ahead but one that can be and must be achieved with determination and coordinated action. As we deliberate upon the serious issues that constitute the agenda of this Conference, it will be in the spirit of strengthening each others’ hands. We will only succeed if we are united as a nation in addressing the concerns related to our internal security. In conclusion, I wish you all the very best in your endeavours and hope that this conference will lead to a better understanding of internal security issues and will also result in more effective responses to the threats we face as a nation.”
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Thai envoy favours integration of NE Buddhist sites
Kohima, Feb 5 (PTI) Thailand today called for integration of Buddhist pilgrimage circuits in India with the eco and cultural tourism sectors of the northeast to boost visits of Thai people to the region.
Increasing number of Thai people are now visiting India-promoted Buddhist tourism circuits which are mainly confined to the east and the central parts of the country, Thailand Ambassador to India Krit Kraichitte said.
The northeastern states should integrate them to places like Sikkim and Tawang for promotion of pilgrimage tourism, he told reporters.
Wrapping up his two-day visit to Nagaland, he said that the northeastern states should also integrate their eco and cultural tourism promotion activities with the Buddhist circuits since the region has potential to attract visitors countries like Thailand.
Kohima, Feb 5 (PTI) Thailand today called for integration of Buddhist pilgrimage circuits in India with the eco and cultural tourism sectors of the northeast to boost visits of Thai people to the region.
Increasing number of Thai people are now visiting India-promoted Buddhist tourism circuits which are mainly confined to the east and the central parts of the country, Thailand Ambassador to India Krit Kraichitte said.
The northeastern states should integrate them to places like Sikkim and Tawang for promotion of pilgrimage tourism, he told reporters.
Wrapping up his two-day visit to Nagaland, he said that the northeastern states should also integrate their eco and cultural tourism promotion activities with the Buddhist circuits since the region has potential to attract visitors countries like Thailand.
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