Year	Crisis
1982	Oil and gas bust
1987	Stock market crash
1991-92	Savings & Loan crisis
1994	Bond Market Debacle
1997	Asian Crisis
1998	Long Term Capital Management/Russian Default
2001-02	Corporate Credit Crisis
2007-08	Sub prime crisis
2011-12	??

Source: Equitymaster, Harch Capital Management LLC As the table shows, we could just be entering dangerous territory again. As per the pattern, the next crisis could well be due in 2011-12. We may not want to predict the timing for the same. However, we are quite certain that crises will keep happening with constant regularity in the future as well. They just cannot be avoided. But an equity investor can certainly come out of it with minimum damage. This can be done by not overpaying for a stock, no matter how good the growth prospects and ensuring that the growth in earnings is not fuelled by too much debt. Follow these golden rules and we are quite certain that no financial market curse will be able to inflict considerable damage on your wealth.

Source: J Mulraj Advice

Source: Economywatch.com

SIKKIM: Ladakh model for eco-school in Sikkim – Walk for clean & green himalayas

source:THE TELEGRAPH

The march near Chintan Bhavan in Gangtok on Tuesday. Telegraph picture

Gangtok, Dec. 29: The head of the Drukpa lineage of Tibetan Buddhism has announced his plan to set up an eco-school in Sikkim modelled on the one in Ladakh that he had helped build earlier.

The Druk White Lotus School in Ladakh provides education in all general subjects under the CBSE curriculum along with lessons on Himalayan culture. It was set up with the support of the XIIth Gyalwang Drukpa, the leader of the 1,000-year-old Drukpa lineage.

The Ladakh institution is popularly known as Rancho’s school named after the main character in the movie The 3 Idiots. Several scenes of the film were shot in the school.

Setting up eco-schools is one of the main objectives of the spiritual leader who is known for his initiatives in creating awareness on environment, particularly those affecting the Himalayan belt. Recently he had been awarded by President Pratibha Patil for his efforts in addressing ecological issues.

“Such schools are the need of the hour. I have shared my idea with chief minister Pawan Chamling. He was positive towards the proposal,” said the Gyalwang Drukpa.

The Drukpa lineage follows the Mahayana Buddhist tradition in philosophy and the methods are based on the Tantrayana teachings.

The lineage gets its name from the word “Druk” which in Tibetan means a dragon. The word also refers to the sound of thunder. Gyalwang Drukpa is the head of the order that has millions of followers across the world.

“I am trying to educate the youth to live healthy and be environmental friendly because people today have developed unfriendly attitude towards nature,” the spiritual leader said.

He was speaking at a programme in Chintan Bhavan yesterday to mark the culmination of a 300km-long “pilgrimage”.

Around 300 monks, nuns and devotees took part in the Kanchenjungha Eco Padyatra or “pilgrimage” led by the spiritual leader.

The walk, aimed at increasing awareness on the ecological issues plaguing the Himalayan region, had started from Darjeeling town on December 2.

The Gyalwang Drukpa complimented the Sikkim government, local associations and the people of the state for taking initiatives to protect the Himalayan eco-system and said the march has given him more confidence to work for environment conservation.

During the walk, the participants picked up waste material that they found along the road they took and disposed them of in a proper manner.

“It gives me immense pleasure to announce the completion of this journey that began almost 27 days ago. It was heartening to witness the warm welcome extended to us by the local communities wherever we passed by. The arrival in Gangtok is like a homecoming for me. This march has been about experiencing this splendid uplifting journey of not only sight but also of the mind,” said the Gyalwang Drukpa.

SIKKIM: Sikkim House session ends in 15 minutes

FROM ASSAM TRIBUNE


GANGTOK, Dec 29: The second day of the two-day Winter session of the Sikkim Assembly, which saw the passage of a Bill and two amendment bills, ended in less than 15 minutes.

The entire proceedings on both days lasted less than 22 minutes making it probably the shortest Assembly session ever to be held in the country.

The House unanimously passed the new Sikkim Lokayukta Bill. It also passed the Sikkim Regulation of Societies, Associations and Other Voluntary Organisations (Amendment) Bill and the Registration of Companies (Amendment) Bill.

They were tabled yesterday by Chief Minister Pawan Chamling without any discussion. This session was also brief.

The vote of thanks given by Chamling, the leader of the House, took less than four minutes. – PTI

Sandeep Tambe: Protecting our Flora and Fauna

My Mentor: Mahatma Gandhi. I read his works, especially his auto-biography (My Experiments with Truth) extensively during graduation.
How he has helped me hone my leadership skills: Gandhiji always led from the front whether it was the Dandi March or the fasts he undertook. Gandhiji also taught about ‘doing it yourself’ and ‘learning by doing’ so that one has the skills to be self-reliant.
His advice that has stayed with me: I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it? Will it restore him to a control over his own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away.

“Shere Khan sees me not as a man but as a creature of the jungle.”
[Mowgli, the man-cub, explains why his formidable foe gave up its grudge against him in the end.]
--- From The Jungle Book movie


Running up the heavily forested Karia Pahari (Black Mountain) after a swim in the Narmada, sweat trickling down his forehead, eight-year-old Sandeep Tambe would often imagine himself as Mowgli from Rudyard Kipling’s iconic tale.

The year was 1979 and Tambe was the youngest in the pack, just like the man-cub. His two cousins, two sisters and a bunch of Gond (a local tribe) friends flanked him. Together they went charging up the hill in their native village of Ramnagar in the Mandla district of Madhya Pradesh — famous for housing the Kanha National Reserve, one of country’s foremost tiger sanctuaries and the inspiration for The Jungle Book.

It was a special day. His grandmother had just let him in on a secret — a tiger was rumoured to be in the jungle. Young Tambe was excited. It was only during summer breaks that he could come out of Rourkela, Orissa where his father worked in the SAIL steel plant. Could this be the day he meets Shere Khan?

Today, the 39-year-old Tambe is a member of the Indian Forest Service. He is a mechanical engineer from IIT Mumbai, a Ph.D. holder from the Wildlife Institute of India, a wildlife photography enthusiast and a long distance runner. For the last three years, he is also the officer-in-charge for the implementation of NREGA (or Mahatma Gandhi National Rural Employment Guarantee Scheme) in Sikkim. But in many ways, Tambe is still quite like the young Sandeep who saw himself as Mowgli.

The only change is that Tambe now spearheads much bigger packs and has more vicious foes than the imaginary Shere Khan to contend with.

Foes like corruption and indifference: Two big reasons why despite being the most widely acclaimed social welfare scheme in the country, implementation of NREGA — or the lack of it — across most states has disillusioned even the people who campaigned for it.

However, in a recent gathering of activists from across the country in New Delhi, bemoaning the problems afflicting NREGA implementation, no one knew about Sikkim’s stellar performance. Neither did they know of the man who made it possible in Sikkim. Perhaps, like everyone else, they missed spotting Tambe since from a distance one only sees the civil servant, a bureaucrat.

But as Tambe nears the end of another routine five-kilometre trek to arrive at a village in the lower reaches of a hill around Gangtok, the Lepchas (the original inhabitants of Sikkim) living in the slopes greet him with such applause that he appears no less than a champion long distance runner being cheered by the onlookers as he is about to cross the finishing line.

“The jungle speaks to me because I’ve learned how to listen.”

Tambe left Infosys, where he was working in the US, for a career in the wild. That was in 1994 “I did it because taking care of the forests and the wildlife gives me the maximum satisfaction and happiness,” says Tambe. “One does not need such material things to be happy in life. [As a child] I saw them [the Gonds of Madhya Pradesh] work hard right through the day and then enjoy themselves each evening.”

It is no surprise then that even as a special secretary-rank officer — the second-highest rung of bureaucracy in the state — he still does not own a TV or a car. What he does own is a scooter which his wife rides and which has made him famous in his residential colony as “the husband of the woman who rides the scooter”!

But what is a forest officer, who loves wildlife, doing implementing NREGA for the rural development department in the first place?

“I have come to see [that] there is not much difference between wild animals and poor human beings since neither can speak for themselves. It gives me immense satisfaction to work for their welfare,” he says.

For the villagers Tambe is an activist, in the guise of an officer, who has transformed their lives by the manner in which he has implemented NREGA.

Today Sikkim is ranked second after Tripura in achieving the most important NREGA outcome — providing 100 days of work in a financial year to the rural people. In 2009-2010, Sikkim could achieve 80 days on an average for the wage seekers, with 23 percent of the households completing 100 days. This is significantly higher than the national achievement of 54 days. For 2010-2011, this figure is expected to cross 90 days for Sikkim.


by Udit Misra

Sandeep Tambe: Protecting our Flora and Fauna

Year End Review – 2010 – Ports and Shipping


Steps to protect seafarers, acquisition of three new ships by SCI, setting up of four new lighthouses along with automation of 30 lighthouses, steps to set up National Maritime Complex, approval of Cruise Shipping Policy and declaration of new Waterways market the main activities of the Shipping Sector. The main developments were:

•The capacity on major ports has increased from 574.77 million tonnes as on 31st March, 2009 to 616.73 million tonnes as on 31st March, 2010.
•The Kolkata Port Trust completed the R&D Project on' Study of impact of Alluvial Meanders and Tributaries on Bhagirathi river' costing Rs. 19.88 crores.
•In the port sector an agreement for development of Container Terminal at Ennore Port at a cost of Rs. 1407.00 crores was signed during June, 2010.
•An agreement for construction of deep draft from one berth from Paradip Port at a cost of Rs. 597.35 crores was signed.
•An agreement for construction of deep draft berth for handling coal on BOT basis at a cost of Rs. 479.01 crores at Paradip Port was signed.
•The project on development of Mega Container Terminal at Chennai port on PPP basis at a cost of Rs. 3686.00 crores with a capacity of 4 million TEU's has been approved by the Government.
•Construction and Development of two berths namely EU-I and EU-1A have been approved for Visakhapatnam Port Trust which will add a capacity of around 14 MTPA under PPP mode.


For the Protection of Seafarers the Government has approved the establishment of the Indian Marine Casualty Investigation Cell. The objective of the Cell is to undertake investigation into marine causalities such as groundings, sinking or collision of vessels or death or grievous injury omission reports of seafarers. The cell would be empowered to:
(i) To conduct investigation into causes of shipping causalities.

(ii) Co-opt experts for the conduct of causality investigations.

(iii) Depute persons within and outside the country for casualty investigation and other related matters.

(iv) Publish reports of finding of casualty investigation in so far as its causes are concerned.

(v) Participate in national and international forum for investigation of marine accident related matters.



To boost Cruise Shipping in the country, Cochin Port in Kerala, New Mangalore Port in Karnataka, Chennai and Tuticorin Port in Tamilnadu and Mormugoa Port Trust in Goa have developed or are developing dedicated passenger cum-cruise terminals.



Cochin Shipyards Limited, Kochi achieved an all time high Net Profit of Rs. 223 Crores for the year 2009-10 as compared to Rs. 160 crores for the year 2008-09. It declared dividend of 10% on equity shares and 7% on preference shares for the year 2009-10. The yard signed a contract for 4 Platform Supply Vessels for M/s. Seatankers Management Company Ltd. Cyprus on 3rd September, 2010. It signed another contract for construction of 20 Fast Patrol Vessels for the Indian Navy on 20 October 2010. During the year 2010 the shipyard delivered 7 Platform Supply Vessels to owners in USA and Western Europe.



In the sphere of Inland Water Transport (IWT) two terminals respectively at Bolghaty Island and Willingdon Island in Cochin Port Trust area to provide connectivity between NW-3 and International Container Transshipment Terminal (ICCTT), Vallarpadam have been completed. These terminals will have LO-LO (Lift on - Lift off) and RO-RO (Roll on -Roll off) facilities.
o NTPC has given commitment for transportation of 3 million tonnes per annual of imported coal from Haldi/Sagar/Sandheads to Farakka by IWT mode for at least seven years. A joint Committee of senior officers of IWAI and NTPC has been constituted to develop and implement this project on PPP mode. In this process an EOL was published in Aug, 2010 which evoked encouraging response from prospective investors and subsequently IWAI and NTPSC are finalizing RFP and other documents to invite bids.

o Under Kaladan Multi project for which Inland Waterways Authority of India (IWAI) is Project Development Consultant (PDC) for Ministry of External Affairs, the bids for construction of port and IWT portion were invited by IWAI on behalf of MEA and work has been awarded by MEA to an Indian Private agency M/s ESSAR Projects (I) Pvt. Ltd. in May,2010

o In May,2010 Addendum to Indo-Bangladesh Protocol on Inland Water Transit and Trade has been signed thereby incorporating Ashuganj in Bangladesh and Silghat in India as new Ports of Call.



Shipping Corporation of India(SCI) - The Government approved issue of fresh equity of 10% by SCI and sale of 10% by SCI and sale of 10% of the existing Government shareholding in the domestic market as per SEBI regulations. The issue opened on 30 November 2010 and was oversubscribed several times. Rs.582.364 crores was raised by SCI/Government of India each. With the recent follow-up public offer, Government of India’s holding in SCI has come down to 63.75% from the existing 80.12%.


SCI proposes to acquire 62 vessels during 11th Plan as part replacement of its vessels scheduled for phase out the end of their economic life and also to enhance its capacity. SCI has so far taken delivery of 16 vessels during 11th Plan period, out of which 9 vessels were delivered during the current year i.e. 2010-11. SCI has placed orders for construction of another 33 vessels. Finance for these acquisitions will be arranged through domestic or international borrowings and the balance amount will be arranged through internal resources and the recently concluded equity issue.



To further International Cooperation and to strengthen cultural ties and also encourage trade and commerce between India and Sri Lanka a Memorandum of Understanding (MOU) for commencement of ferry services between Tuticorin and Colombo and between Rameswaram and Thalaimannar has been finalized and the proposal for signing of the MoU has been approved by the Govenment. The proposed ferry services would ensure mobility of people and increase trade, tourism and development activities.



To provide Aid to Navigation Two New Lighthouses at Mallapatnam and Pumpuhar and one DGPS station at Rameswaram (All in Tamil Nadu Coast) have been established in the year 2010. Work order for National Automatic identification system to cover the entire Indian Coast line, which will help also in the surveillance of the Indian Coast Line, has been placed. An amount of Rs. 99 crore has been collected as Light dues during the year up to November, 2010.


In the Port Sector, during the year 2009-10, 13 PPP projects were awarded at the Major Ports envisaging an amount of Rs. 265377 crore and a capacity of 65.65 MTPA. In addition, 6 PPP projects have so far been awarded in the current year till December, 2010. This private investment will inject Foreign Direct Investment into the port sector and will result in creation of additional capacity in the ports.



Ennore Port Ltd.(EPL) : The project of Development of Container Terminal with 1.5 TEU's capacity and costing Rs.1407 crores, on BOT basis has been approved by the Government and an agreement was signed on 13th August, 2010.



In order to improve connectivity, 18.3 Km four-lane Elevated Expressway from Chennai Port to Maduravoyal on National Highway 4 has been approved by the Government recently. Chennai-Ennore Port Road Connectivity of 29.3 Kms length with an estimated project cost of Rs.309 crores is also underway. 4-laning of Tuticorin-Madurai Road (NH 45 B) with road length of 144 Kms at an estimated cost of Rs.629 crores has been sanctioned, work awarded and Financial Close achieved in January, 2007 and scheduled to be completed by 2010. Doubling of Madurai-Dindigul Section of railway line connecting Tuticorin Port of 62.06 Kms. Length with estimated project cost of Rs.126 crores has been sanctioned and the work has been awarded. Ambaturai-Kodaikanal road doubling has been merged with his work.


Chartering: During the year 2010 ( January-December, 2010), the chartering Wing made shipping arrangement for and on behalf of Government Departments and PSUs for Cocking Coal, Fertilizers, Crude Oil, Iron Ore, Lime Stone besides project cargoes of 198.43 lakh MT



Besides making shipping arrangements for movement of cargoes, Chartering wing chartered an ice Breaker and an Expedition Vessel for National Centre for Antarctic and Ocean Research for the 30th Indian Antarctic Expedition.



During the year Chartering wing collected one percent Chartering Service Charges amount to Rs. 1.45 crores (January-December)

******

MC/

Urgency of saving water

(China Daily)
Updated: 2010-12-29 08:00


In the past 22 years it has been rare for Beijing to have no precipitation for two months. That this is the case now has added to the already serious water shortage for this city of 20 million people. What is even worse is the overuse of underground water, whose average level will soon drop to 30 meters underground.

Usually the rainfall during the rainy season accounts for one third of the annual total precipitation, but this year it has been just 25 percent, the least in 50 years. The amount of rain has dramatically decreased since 1999. Statistics show that the total amount of precipitation in the past decade has been about 20 billion cubic meters less than the 10 years up to 1999.

Beijing uses 3.79 billion cu m of water a year, the deficit of 1.79 billion cu m will depend on supply from the surrounding provinces, which are themselves plagued by water shortages. Even if the project to divert water from the south to the north starts to supply water in 2014, it will be able to provide only 1 billion cu m a year.

All these figures point to the urgency of saving water in every conceivable way. It is reported that the Beijing government is drafting regulations to ban such water wasting entertainment establishments as bathhouses, ski runs and golf courses.

Yet, just this week a new ski run opened in Huairou district, which not just wastes water by making artificial snow with fresh water but also damages the environment by destroying the bushes and grass within the run. In 2005 it was estimated that the 13 ski runs in operation at that time consumed enough water to meet the needs of more than 40,000 Beijing families.

Beijing also has about 3,000 public bathhouses, which consume about 5 million tons of water a year. The amount of water used to wash cars reached 30 million tons a year when the city had 3.3 million cars in 2008. The amount of water used has soared as the city now has 4.7 million cars and some car washing shops have been caught stealing fresh water for their business.

These figures show that the capital has great water saving potential. The total number of bathhouses, ski runs, car washes and golf courses can be reduced. Residents can be encouraged to clean their cars themselves in a water-saving manner.

Beijing cannot afford to let people use water as they have been doing.

SIKKIM: Fresh tenders for Ranka park – Third bid to open rs 55-cr facility

THE TELEGRAPH

The amusement park at Ranka

Gangtok, Dec. 28: The Sikkim government has invited fresh tenders for the management and maintenance of the amusement park at Ranka, which is yet to be opened for public after its inauguration by the President eight months ago.

The Rs 55-crore project has been touted a major tourist attraction and a much-needed recreational centre for people in and around Gangtok. This is the third time tenders are being invited to run the Kanchenjungha tourist-villa-cum-socio cultural amusement park.

The tourism department, which was entrusted to lease the park, last week sought bids with minimum base price of Rs 3 crore for the commercial operation, management and maintenance of the facility from interested parties. January 27 is the last date for the submission of the tenders and anyone with business assets worth Rs 10 crore can bid.

According to the terms outlined by the tourism department, the initial lease period of the park will be 15 years and it might be extended for five more years based on the performance of the operator. The lease amount will be increased at five per cent per annum from the fifth year onwards till the termination of the contract.

The tourism department has indicated that the park at Ranka, 35km from here, will be operational from April 2011. The park was inaugurated by President Pratibha Patil during her three-day tour of Sikkim in April.

The park had been dogged by controversies even before it was inaugurated with the state BJP unit alleging massive corruption in its construction undertaken under the supervision of the rural development department.

When the first tender was invited, it was bagged by master con man Rajesh Jhunjhunwala from Calcutta, who nearly bagged the contract for the park on the basis of fake bank documents.

After Jhunjhunwala’s audacious plot had been exposed, the rural development department invited tenders for the second time in September and a local enterprise bagged the contract at an annual lease amount of Rs 155 lakh.

However, the cabinet cancelled the contract and handed over the responsibility to run the park to the tourism department.

The cabinet took the decision as all government-created assets for visitors were transferred to the tourism department for proper management and it felt that similar arrangement was needed for the Ranka park also.

The park, spread over 17.5 acres, is a unique tourism attraction fusing cultural ethos of Sikkim with modern amusement amenities with the objective of providing wholesome entertainment to the visitors to the Himalayan state. The facility has 12 shopping arcades to sell handicrafts and other souvenirs of Sikkim.

There are also other facilities like musical fountain with laser shows, open air theatre, ride simulators, swimming pool, bar and bowling alleys.

Once the park is opened, it will turn into a major rendezvous for people of Gangtok who have limited options now to spend their idle time with their family. Most of the attractions are tourism-centric and far from the capital.

Create Harvards and Oxfords in India

By Dr (Mrs) Vishiesh Verma

Indian students are a step closer to gaining access to foreign Universities on the home ground. The cabinet has approved a bill allowing overseas players to open campuses in India. If the things go according to the plan, once the foreign educational institutions (Regulation of entry and operations) Bill 2010 gets parliamentary approval, the first set of foreign educational institutions will start functioning by mid 2011.
India is the third largest higher Education system in the world after China and US in terms of enrolment, which is around 11.04 million(2005-06). In spite of impressive quantitative expansion it lags far behind the developed nations with regard to access to higher education. Nearly `45000 cr per year is repatriated out of India for 3, 00,000 Indian students studying abroad. There are several reasons for so many students going abroad for higher studies, the prominent being; only a small number of Indian Universities occupy a good position amongst the ambit of top class educational institutions to provide best quality higher education. These world ranking institutions are mainly restricted to IITs, IIMs and some universities.

More than 90 percent of the aspirants for admission to these institutions don't get selected not for want of qualifications of the applicants but for the capacity constraints in the institutions. In 2009, 4.5 lakh candidates appeared for JEE test for 10,000 seats. The Vice Chancellor of Kashmir University was sorry to admit only 4,000 students in various subjects out of 35,000 applicants. This year's qualifying marks for B.Com (Hons.) course in Delhi's SRCC was 98.75 percent. Nearly `3,000 crore per year is spent by nearly 6,00,000 students trying to arrange and learn for entrance examinations into IITs and top twenty management institutions. All world class institutions put together provide education to only one percent of the student population seeking higher education. Under such situations, foreign Universities provide safety valve for talented well off Indian students who can't find seats in their chosen fields in Indian Institutions. All these Indian World class institutions put together provide education to one percent of students seeking higher education. The remaining 99 percent students get enrolled in low ranking Universities and Colleges under compulsion.

The employability of students coming from such colleges is also in question especially in special fields like engineering. NASSACOM study states, 'only 25 percent of India's engineering graduates are fit for employment, the rest lack technical skills even knowledge of English'. There are reasons for decline of Indian higher education.
We fall short of educational institutions. During the last fifty years there has been 60 times increase in the college going population but the number of colleges haven't been increased according to that proportion. Financial support for higher education in terms of GDP decreased from .01% in 1971 onwards to 0.4% in 2001. Out of the funds available for education 95% are spent on the salaries of staff. The present higher education system is catering to the needs of less than 10% of aspirants. The dropout rate between the classes 1st to 12th is about 90%.

No doubt, with all these internal weaknesses, India managed to survive with her increasingly mediocre higher education system. Now in 21st century we have no choice except to compete in a globalized economy in the areas that require highly trained professionals, thus the quality of higher education automatically assumes greater importance.
India is a country bubbling with youth population. About 60 crore population is below the age of thirty years. According to India's report on unemployment the average Indian will be only 20 yrs in 2020 compared to 37 in China and US, 45 in west Europe and 46 in Japan and for a country so young it would be boon to a create a well trained work force.
Inviting foreign Universities in India is one of the strategies of Government to expand higher education system in terms of quantity and quality. It is supposed that it will curb the outflow of foreign exchange. Besides it will fill demand and supply gap, and make higher education globally competitive.

Besides it is expected that with the establishment of foreign Universities over here three fourth of students exodus would end. Working of foreign Universities would have impact on the performance of domestic education providers. With global standards of teaching and infrastructure every local institute will need to compete, to attract students with improved pedagogy, internationally accepted courses and upgraded facilities. There will be a qualitative change in the educational institutes at national level. Good international Universities can help improve quality in Indian Universities not just through increased competition for students but from increased partnership and sharing of best practices in teaching and learning. To that extent, the foreign Educational Institutions (Regulation of Entry and Operations) Bill 2010 is welcome.

Education Minister, Kapil Sibal has described the bill as "a milestone, which will enhance choices, increase competition between Indian and foreign Universities and bench-mark the quality."

There are many debates on the issue of entry of foreign institutions in India. Prof Yashpaul said, there is no wisdom to be got from outside the country. Setting up a University isn't buying office space and furnishing it. There is more of it, something that comes from teacher and student interface. That can't be imported by teachers. To him "Foreign University Bill is only about signing agreement between Babus in India and abroad, it has little to do with education".

There is no denying that educational export are a promising source of foreign exchange, at present foreign students contribute US $11 billion to the US economy and over AUS $ 4.2 billion to Australian economy. In America Colleges, age population declined by 15% per decade since 1977, therefore the Universities in US survive on export of education.
So far three Universities have shown interest in India. American University ranked 84th on a scale of zero to 100, Virginia Technical University ranked 71st and Georgetown ranked 23rd. The ranking of first two Universities show that they are not preferred by American students. Georgetown University was basically founded by Catholics and Jesuit in 1789, with the aim of educating theology. There are still compulsory papers on theology that each student has to clear as apart of the curriculum. The Universities like Harvard, Oxford won't shift to India. A University is much more than a place of teaching, it also has a cultural ambience rooted in its traditions and geographical locations. But it is certainly possible to create educational centers of excellence in India which are world class and could successfully seek some sort of affiliation with world famous Universities. The government is in a hurry to start 1500 universities by 2015. Professor Yashpaul, Chairman of the committee on "Renovation and Rejuvenation of Higher Education" recommends that India has about 26000 affiliated colleges, but some of these colleges are as big as some of the Universities in USA. A small number of good affiliated colleges, about 1500 may be converted into Universities. This will take care of our present need of adding more universities. It is possible to create such educational centers of excellence in India and get them affiliated to famous Universities. Let these College charge fees required to maintain excellent standards. Let there not be caste based reservations. These super colleges to be privately funded and would be insulated from political interferences. Money is available for education from private donors provided there is no political interference in running of these institutions.

We appreciate and invite foreign Universities to provide world class infrastructure, teachers, administrators, those who make the students work hard during their stay in the institution. Such institutions make out the program where students and teachers have to stay and work to the maximum. There is transparency in appointments and results. No political interference, no favors. The teachers have to earn their stay in the institutions based on the opinions of students and students have to pay for their stay in the institution.

(The writer is a former Reader Coordinator of University of Jammu)

Clean the city, use the garbage

by Isher Judge Ahluwalia


Garbage in open dumpsites on the streets of Indian cities is a common sight and a huge health hazard. The solution has not only to do with “solid waste management” but a lot to do with residents understanding the value of keeping public places clean and its link with health. Hygiene, like charity, begins at home.The Rajkot Municipal Corporation (RMC) has done it. They have launched a dual campaign to raise public awareness of the menace as well as improve the coverage and quality of their service to collect solid waste from the households and manage its scientific disposal through public-private partnership. This along with building “pay and use” toilets in different parts of the city, has made Rajkot a clean city, earning it a place among the 10 cleanest cities in the country. The corporation received Rs 8.7 crore for solid waste management from the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Of this, Rs 5 crore was used in the purchase of equipment and vehicles for collection and transportation of solid waste, eg, wheelbarrows, cycle rickshaws, bins, hydraulic dumpers and JCBs (excavators). Until three years ago, only 25 per cent of the households had their garbage collected from their homes by the municipal corporation. Today, close to 90 per cent are covered by hiring 1000 women from Sakhi Mandals (self-help groups) who are paid Rs 10 per household per month for a three-hour service (7 am to 10 am) of door-to-door collection using wheelbarrows with separate compartments for dry and wet waste.Dressed in their uniform with whistles hanging round their necks, the Sakhis looked every bit their part. They are free to sell any recyclable material from the waste to supplement their income, which adds up to about Rs 3,500 per month. The rest of the garbage is delivered by them in covered bins at specified locations in the city. The households are not being charged for the service to help them form the habit of segregating dry and wet waste before collection. The corporation set up two transfer stations in 2007 from where the waste is transported to the disposal site (22 kms away from the city) by two private contractors who were awarded the contract through competitive bids. This ended the practice of dumping at two open sites, each about 10 kms away from the city. The waste is taken from covered bins to the transfer stations using municipal staff and private contractors. No litter on streets/public places and no use of plastic bags were the other themes of the clean city campaign. RMC has gifted 6,000 dustbins to shopkeepers and 4,500 bins have been located on the main roads for spot collection. Mobile vans ply the city throughout the day for residual collection. Since April 2008, there is also a penalty for littering in public places and for using plastic bags, and also for not segregating garbage. This has yielded Rs 50 lakh to the municipal corporation, as of November 2010. Under a “one day one ward campaign”, concerned officers from all departments of the corporation visit the same ward once every 23 days (the city has 23 wards) to review and fix any interdepartmental problem of coordination. The municipal commissioner, Dr Dinesh Brahmbhatt personally oversees the cleanliness drive in the city. On certain days of the month, school students are given the authority to determine the “dand” (penalty) for dirtying the city. In the vegetable market at the newly set up hawkers’ zone, the customers were proudly showing off their colourful fabric bags and declaring how they were shunning plastic bags. The floor of the open market certainly looked very clean. The hawkers were taken off the streets and located in a four-walled open plot for a monthly payment of Rs 25 per thela (cart). The hawkers were relieved not to have to pay bribes to operate from the streets and pavements. Attached to the open market is a “pay and use” toilet for public use. Typically, the charge was 50 paise and it has now been raised to Re 1; the toilets are free for women and children. In all, 150 “pay and use” toilets have been constructed, of which nearly 90 are in slums, with special arrangements for children. The corporation is also building seven “high-end” toilets on a BOT basis, charging in the range of Rs 2 to Rs 5 for each use, and generating revenue through sale of advertisement rights. Processing and disposal of solid waste is being handled through a public-private partnership with Hanjer Biotech Energies Pvt. Ltd. Hanjer was awarded a Build-Operate-Own contract through a negotiated bid in 2003 to set up a waste processing plant, the first of its kind in the country. The corporation gave 30 acres of waste-land on lease at Re 1 per square metre to Hanjer in Nakarawadi village, 22 kms away from the city. It has agreed to deliver 300 metric tonnes of garbage to the plant every day and also committed to supply upto two lakh litres of water per day and electricity for the plant’s operations. Construction started in June 2005 and the plant was commissioned in April 2006. Hanjer makes its money by processing the waste. The segregation at the plant into dry, waste and inert materials is largely automated. Daily, Hanjer produces about 40 tons of organic compost, 70 tonnes of green or slow burning coal and 2.5 tonnes of plastic lumps from the 300 metric tons of waste. The wet waste (20-30 per cent of the total) is used for making organic compost, which is sold in the domestic market as well as exported to Oman and Pakistan. The dry waste (30-40 per cent of the total) is used for making green coal, which is sold to nearby ceramic factories and also to the cement industry. Plastic lumps made from plastic waste are sold for manufacturing irrigation pipes. The recyclable waste (about 3 to 5 per cent of the total) is segregated and also sold. A scientific landfill site adjacent to the waste processing plant is under construction by Hanjer and is being paid for by the RMC through funds from JNNURM. The site is expected to be completed by March 2011. It includes development of bunds, layers of geo-textile and clay, and lechate drains.Only about 10-15 per cent of the total waste in the form of inert material will go into the landfill site. RMC shall pay Hanjer Rs 220 per tonne of inert waste going into the site, subject to a maximum of 20 per cent of the total waste, in line with guidelines under the Municipal Solid Waste Rules 2000. The corporation has paid an advance installment of Rs 30 lakh to Hanjer, which will be adjusted against the filling of the site with the inert material, once the site is functional beginning March, 2011.Indeed the system of waste disposal can be improved. If lease rental could be determined through open competitive bidding, then it should be possible to cover situations even with negative lease rental if the revenue stream does not cover the costs.Rajkot has shown that remaining clean is a win-win situation.

source; Indian Express


Isher Judge Ahluwalia ,is chair of Icrier and of the high-powered expert committee on urban infrastructure. Nair is a consultant to the committee. Views are personal, postcardsofchange@expressindia.com

 
Data source: World Bank

'India's history is in two phases, before and after RTI'

Dec 29, 2010, 12.00am IST

A leading RTI campaigner, Subhash Chandra Agrawal is focussed firmly on ground realities. With a distinguished pedigree of engaging the state and media to bring about improvements to the everyday lives of ordinary people, he speaks to Deep K Datta-Ray about his campaigning work and the RTI Act.

How did you begin campaigning, does it support you financially?

The work supports me emotionally and intellectually! My trade is textiles. All my RTI Act work is done in the mornings and late evenings. I only attend Central Information Commission (CIC) meetings during the day. This is a hobby, but not a self-indulgent hobby because it helps other people by opening avenues for investigation.

All this began 43 years ago with my writing a letter. At university, i saw there was collusion between the bus conductor and the students and so i sent a letter to a newspaper. The next day the bus company came to my campus, and i was so frightened that they were going to do something to me that i ran away. Actually, they had brought the conductor to apologise. It was a potent lesson, that a small individual could be the harbinger of change. From these humble beginnings, i graduated to filing RTI petitions.

What do think of the RTI Act?

Quite simply historians who speak of 'India after Gandhi' are wrong. If we are to compartmentalise, then India's history is in two phases, before and after RTI. The watershed is the Act which current popular historians miss. The Act is the most significant post-independence legislation. RTI's significance lies in that it bestows the common citizen with the powers of the legislator to question.

There is more. A parliamentarian has only one chance to get a written reply to a starred question. We have two more bodies, first the Central Public Information Officer (CPIO), then the CPIO department head and finally the CIC. The Act is good and though it functions well because most CPIOs are user-friendly, there is always room to improve the procedural side of things.

What improvements can be made?

I'll limit myself to a few suggestions! Sections 27 and 28 of the Act give powers to public authorities and the state governments to draft their own rules. On occasion they contradict the Act. For instance, the Delhi high court imposed fees of Rs 500 for a request, whereas the normal fee is Rs 10. The fee is still five times more than the norm and this is a financial bar. Interlinked is cumbersome procedure. People have to go to the post office, get postal orders, post them, wait for a reply and then post again with postal orders since we usually ask for documents. Part of the purpose of imposing charges is to sift the wheat from the chaff, to get genuine well thought out requests.

This means a balance has to be struck between clarity and quality. However, this long-winded process could be shortened considerably with a reusable RTI stamp and sold at the post office. This would also save money. To process a Rs 10 postal order in 2005, it cost Rs 23. It must be more now. Another example is that the letter they send you telling you that you have to pay Rs 2 per page to get some photocopies, costs Rs 27 to post.

A simple solution is to increase the basic fee to Rs 20 and give the first 10 photocopied pages for free. This would save money and shorten the process. At the macro level, there has to be better education about the Act because most people still don't know about it while others don't realise that they have appellate authorities to go to.

source;Times of India

Corruption is damaging the value of Brand India

by Rajeev Srinivasan



Rajeev SrinivasanThe staggering loot in this year’s headline scams benumbs us to the massive human tragedy that underlies them. As Stalin once said, “The death of one man is a tragedy. The death of millions is a statistic”. Still, there is a price to pay. One reason for tribal insurgencies in India today is lack of development. And then there are mercy killings and suicides. There is a direct correlation among these: people die, or live stunted lives, because of larceny by the rich and powerful.

The story of thalaikoothal in Virudhunagar was reported by Tehelka magazine (‘Mother, shall I put you to sleep?’, November 20). Apparently impoverished people in Tamil Nadu are ritually murdering their aged parents for a simple, rational reason: they cannot afford to support them.

This story reminds me of a powerful film, The Ballad of Narayama (1983), set in 19th-century Japan that deservedly won the Grand Prize at Cannes in 1983. Set in a poor mountainous area where the land has limited carrying capacity, it illustrates a ritual called ubatse. Every time a child is born, an old person has to die, for they cannot afford to feed that extra mouth.

In effect, it means that at the age of 70, every old person will be taken to the snowy peaks and left there to die of starvation and exposure. In the film, an iron-willed matriarch resolves that when her time comes, she will go of her own will, and not be dragged kicking and screaming. She methodically arranges her affairs, and then forces her grief-stricken, unwilling son to carry her to the mountaintop, where she will die.

It is an indictment of the failure of our leadership that something from pre-industrial Japan 200 years ago finds echoes in today’s India. But this is merely a particularly graphic illustration of the fact that the systematic siphoning off of funds from India is, literally, killing its people. In this, India is similar to some resource-rich countries, which have borne the ‘curse of oil’: the vast wealth from petroleum has often led to more, not less, misery for the people.

The Economist argues (‘The paradox of plenty’, December 2005) that the reasons are massive corruption, weakened institutions, and lack of competitiveness in other industries. And just plain disdain for the masses. In the oil-rich Niger delta, it appears there has been massive environmental damage and pollution, suffered by the locals who have got nothing to show for the billions dug up from under the ground.

India’s principal wealth is in agriculture and human resources.

These were enough in historic times to make India the wealthiest nation in the world, as per Angus Maddison (The World Economy: A Millennial Perspective, OECD, 2001). It was massive capital transfers by the British and the systematic dismantling of light industry that have caused enduring misery.

The underpinnings of corruption in India were also created by the British. Their buccaneer John Company types were given poor salaries, and were expected to make their fortunes through means fair or foul; most chose foul. Robert Clive, when impeached by the British Parliament in 1676, disclosed that his net worth was sterling £401,102. His annual salary had only been between sterling £1,000 and £5,000, according to PJ Marshall (East Indian Fortunes: The British in Bengal in the Eighteenth Century, Oxford, 1976).

Nevertheless, India is an economy that still generates large amounts of surplus, especially now that its GDP is growing rapidly. This has given an impetus to corruption and the disappearance of funds to offshore accounts and into things like religious conversion. Instead of enabling the poor to claw their way out of poverty, the surplus is skimmed off. Money that could have built roads, ports, schools, hospitals and world-class universities has been swallowed by private individuals.

A recent report from Global Financial Integrity program at the Center for International Policy, Washington DC (The Drivers and Dynamics of Illicit Financial Flows from India: 1948 to 2008, November 2010) estimates that $462 billion has been stolen in sixty years, and that this accelerated to $16 billion per year towards the end of the study period. Undoubtedly, with the scams that are now coming to light, this decade’s loot will be exponentially higher: the CWG and 2G scams alone add up to $60 billion in vanished wealth.

The nation is turning into a banana republic. Not only politicians, but also the media, the judiciary, the armed forces and even the Vigilance Commission, are being drawn into this web of kickbacks and payoffs. In addition to human misery, it has economic consequences. A recent Stanford study (Corruption and International Value: Does Virtue Pay?, November 2010) suggests that firms in corrupt countries suffer a loss in market value. Surely, those corrupt countries suffer the same: Brand India is being hurt.

source:DnaIndia

Dragon and Elephant: Complicated NeighbourhoodDragon and Elephant: Complicated Neighbourhood

Written by: Sameer Jafri

Year 2010 marks sixty years of diplomatic relationship between India and China. Though the relations between the two go back to ancient times, the period since 1950 till present is mainly fraught with boundary dispute, which also led to a short-lived war in 1962. But in recent times, both sides have successfully attempted to normalize the bilateral relationship, mainly driven by the mounting bilateral trade. Although strengthening economic relationship has overshadowed other areas of conflict, that doesn’t provide any space for complacency, particularly on Indian side of the fence.

Amongst the major areas of conflict, the most important one is relating to the boundary dispute. While on the Western frontier, some part of Kashmir region is under Chinese occupation, on the Eastern side of frontier, the dispute relates to McMahon Line. India treats that as the Line of Actual Control (LAC) but China refuses to recognize it, even though it recognizes the same McMahon Line with Myanmar. Many attempts have been made to resolve the boundary dispute but results have been very modest. In 2003, Prime Ministers of both countries agreed to appoint Special Representatives (SR) to discuss and find a solution to the dispute. Also, during Chinese Premier Wen Jiabao’s India visit in 2005, Beijing and New Delhi agreed on broad parameters to resolve the border dispute. This gave political mandate to the SRs. Despite above efforts, the recently concluded 14th round of talks between the SRs in Beijing, failed to produce anything substantial, apart from the SRs sharing the respective political and strategic concerns of their nations.

The bone of contention, other than border issue, is both nations’ respective relationships with the third countries. While India is irked by strategic relationship enjoyed by China and Pakistan, China on the other hand, is anxious by growing Indo-US proximity. The main reason for India’s worry is Beijing’s defence and nuclear assistance to Pakistan and also Chinese presence in what India calls Pak Occupied Kashmir (PoK), by way of ‘infrastructure building.’ Moreover, since two years now, China has started issuing stapled visas to Indians domiciled in the state of Jammu and Kashmir, thus challenging India’s sovereignty and territorial integrity.

In addition to this, China’s overtures to Nepal and infrastructural assistance to Sri Lanka provide substance to India’s fears of ‘String of Pearls’ phenomenon. Added to this, the upstream damming of trans-boundary Rivers (Sutlej and Tsangpo-Brahmputra) by China, and that too without intimating or consulting downstream nations (in this case India), contradicts the “Peaceful Rise of China” doctrine. This arrogance of dragon is rooted in its sheer economic might and lately acquired defence capabilities.

Recent visit to India by Chinese Premier Wen Jiabao was expected to clear the air on above issues and strengthen the partnership in various areas of strategic convergence. But unfortunately, it did little to lift Indian unease over border dispute and Sino-Pak relations. The joint communiqué fell short of condemning 26/11 Mumbai attacks and calling on Pakistan to control terrorism, even though “both sides agreed to combat terrorism in all its forms through joint efforts.”

Notwithstanding this, what has tied together New Delhi and Beijing is trade. Wen brought with him a business delegation of over 300 executives, largest ever by any leader to any country. On very first day of his visit, business deals worth over $ 16 billion were signed. Presently, annual bilateral trade is about $ 60 billion. Both have set a new target of $ 100 billion by 2015. Here too, India’s concern about its increasing trade deficit has been met by mere assurances by Wen on opening Chinese markets for Indian IT, Pharmaceuticals and engineering goods sectors.

Being world’s two most populous nations and fastest growing economies, India and China share lot in common. Cooperation between the two has been evident on international fora and issues like WTO, Climate Change, reforms in international financial institutions, and groupings like G20, BRIC and RIC. Here again, Chinese gesture falls short of clearly endorsing India’s bid for permanent membership in UN Security Council, with joint communiqué stating “China understands and supports India’s aspiration to play a greater role in the UN, including in the Security Council.” All other veto members of UNSC, including the US President Obama lately, have unambiguously endorsed India’s permanent admission to the body.

The Sino-India relationship is a tightrope walk. Careful orchestration of policies on both sides is need of the hour. Notwithstanding coordination and cooperation on various regional and international issues, both India and China have different visions for an ideal Asia and the ideal world. While India envisages both a multipolar world and a multipolar Asia, China envisions a multipolar world and a unipolar Asia. But being a bigger, more powerful neighbour and a responsible global power, China should understand and address the legitimate concerns of India and stop treating it as a rival. It will not only reduce the scope for any outside interference but will also be a giant leap forward in achieving everlasting peace and security in the region. After all, both sides agree on the fact that there is enough space in the world for both Dragon and Elephant to grow peacefully.

About the author:
Sameer Jafri

Sameer Jafri is an India-based political analyst. He usually writes on global and geopolitical issues. He can be reached at- sameer.jf@gmail.com

source:

An excerpt from
Eat That Frog!
by Brian Tracy

The 80/20 Rule is one of the most helpful of all concepts of time and life management. It is also called the "Pareto Principle" after its founder, the Italian economist Vilfredo Pareto, who first wrote about it in 1895. Pareto noticed that people in his society seemed to divide naturally into what he called the "vital few", the top 20 percent in terms of money and influence, and the "trivial many", the bottom 80 percent.

He later discovered that virtually all economic activity was subject to this principle as well. For example, this principle says that 20 percent of your activities will account for 80 percent of your results, 20 percent of your customers will account for 80 percent of your sales, 20 percent of your products or services will account for 80 percent of your profits, 20 percent of your tasks will account for 80 percent of the value of what you do, and so on. This means that if you have a list of ten items to do, two of those items will turn out to be worth five or ten times or more than the other eight items put together.

Number of Tasks versus Importance of Tasks
Here is an interesting discovery. Each of the ten tasks may take the same amount of time to accomplish. But one or two of those tasks will contribute five or ten times the value of any of the others.

Often, one item on a list of ten tasks that you have to do can be worth more than all the other nine items put together. This task is invariably the frog that you should eat first.

Focus on Activities, Not Accomplishments
The most valuable tasks you can do each day are often the hardest and most complex. But the payoff and rewards for completing these tasks efficiently can be tremendous. For this reason, you must adamantly refuse to work on tasks in the bottom 80 percent while you still have tasks in the top 20 percent left to be done.

Before you begin work, always ask yourself, "Is this task in the top 20 percent of my activities or in the bottom 80 percent?"

The hardest part of any important task is getting started on it in the first place. Once you actually begin work on a valuable task, you will be naturally motivated to continue. A part of your mind loves to be busy working on significant tasks that can really make a difference. Your job is to feed this part of your mind continually.

Motivate Yourself
Just thinking about starting and finishing an important task motivates you and helps you to overcome procrastination. Time management is really life management, personal management. It is really taking control of the sequence of events. Time management is having control over what you do next. And you are always free to choose the task that you will do next. Your ability to choose between the important and the unimportant is the key determinant of your success in life and work.

Effective, productive people discipline themselves to start on the most important task that is before them. They force themselves to eat that frog, whatever it is. As a result, they accomplish vastly more than the average person and are much happier as a result. This should be your way of working as well.

Behind the new gold rush

by T. Balakrishnan

The price of gold has gone up from $256 an ounce in 2001 to $1,424. Meanwhile, price levels have struggled or crashed with respect to almost all other asset classes. Central banks have slashed interest rates
Is the next perfect bubble building up around the yellow metal?

The price of gold has gone up from $256 an ounce in 2001 to $1,424. Meanwhile, price levels have struggled or crashed with respect to almost all other asset classes. Central banks have slashed interest rates. Yet, gold prices, it has been predicted, may go up and up. The many reasons for this renewed love are convincing. Interestingly, not long ago pundits had predicted the end of gold as the world's default asset class and were clubbing it with commodities. It appears that the yellow metal is making a comeback to reassert the pre-eminence it has enjoyed for 5,000 years of history.

Its supply is falling. No new mines have been discovered. The existing ones are getting exhausted, and miners are digging as deep as 5 km. Gold content in ore has come down from almost 12 gm a tonne to 2 gm. And it costs more and more to take that out.

Environmental concerns have also contributed to mine-owners' problems. The wages of miners are going up; so is the cost of providing them safety and security.

Emerging economies such as China and India are accumulating gold in order to reduce their dependence on the dollar. While the U.S. has a reserve of 9,200 tonnes of gold, China has 1,054 tonnes and India 565 tonnes. No wonder, as emerging economic superpowers China and India want to add to their reserves. Industrial use of gold is on the rise the world over. With the U.S. economy still drifting with the threat of the dollar losing its undisputed position of reserve currency, the rush to gold is increasing. The zero-interest regime in the U.S. is driving more private individuals to go for gold.

Added to all this is the rekindled investor-preference to gold. Money is moving away from mutual funds and equities and the once fashionable and often discredited hedge funds are also getting into gold. Exchange traded funds (ETFs) are channeling ever more funds to gold. Some pension funds are increasing the proportion of gold in their basket of assets. Given all this, gold can go nowhere but up. That is the consensus.

Everyone seems to be joining the new gold rush. But is everything well with gold? Or is it a bubble building up?

Consider the conventional wisdom. Money generally gets distributed, though not in any fixed proportion, among assets such as real estate, stocks, cash, government securities, gold, commodities, and in new investments in factories and machinery. There is no state of equilibrium in a global economy. Money gets transferred across geographical boundaries and asset classes based on anticipated gains. As long as the flow is reasonable and generally in line with the increase in returns, this works well. But when everyone rushes to the same destination, we are looking for trouble. Excess demand, though often artificial, creates excess supply, as in the case of real estate. Excess supply leads to price crashes. But in the case of gold, the argument is that excess demand cannot create excess supply as the total world supply is limited. People have a short memory and the Black Septembers, dot-com busts, currency crashes and real estate collapses are forgotten. Everyone, as usual, rushes to the next mass destination, creating another bubble. In all these collapses and crashes, those who are early to get in and get out, make big money — and the last ones are left holding the baby.

Is something similar happening in gold? The general consensus is ‘no.' Gold is different. It has never let anyone down in 5,000 years. It is indestructible. Its supply is limited. But this time it is different. Is it really so? Gold has also gone up and down in the past. It was $424 an ounce in 1990 before crashing to $255 in 2001. Still, it moves only within a range and huge fluctuations are not possible in gold, argue some people. Actually, gold gave much better returns in the 1980s, only to stagnate and lose those gains in the 1990s.

What can spoil the party? U.S. interest rates? Can the U.S. hold on forever to a near-zero per cent interest regime as Japan has done for almost two decades? Can the U.S. avoid the inflationary pressures created by all those green notes printed in the last few years and the money blown up in Iraq and Afghanistan? Is gold the permanent safe bet, as we are led to believe?

In real estate, it was Japan's turn first. Throughout the 1980s, prices kept climbing on the back of a booming economy and stock market. The arguments were sound. Japan is short of land. Nobody makes land anymore! The Japanese need bigger buildings. The economy is booming and will continue to do so. Well, naturally the prices kept going up — till the crash occurred. That happened in the early-1990s, and prices are still half of what they were during the boom.

The story was slightly different in South-East Asia in the late-1990s, but the outcome was not. We heard it again in 2008. Housing is the backbone of society. The U.S. is made up of house-owning families. The U.S. is not Japan. Well, there are millions of houses looking for new owners in the U.S. even now.

It was different in Dubai. Dubai was not building for locals and expatriates alone. It was not for Emiratis alone, and not just for Arabia. It was for the whole world. Dubai cannot crash! Well, it did, and very badly.

What about the stock market? Nikkei was almost 40,000 in 1989. It is around 10,000 in 2010. The Dow Jones was already 10,000 in 1999 and the brokers were predicting it would go to 40,000. What happened to all the pension funds, trust money, 401k savings that went into the stock market at their peak in the U.S.? We are in 2010, and the Dow is still around 10,000. Oil was $40 a barrel in 1973 before crashing to $13. It went up to $140 and was speculating to go to $200 before someone punched the barrel. It is still around $90.

A crash of gold prices could be the ultimate crash, nothing like we have seen. No one has managed to discredit the yellow metal in 5,000 years. But it appears that for the first time in history the ETFs, the hedge funds and the governments are about to do the undoable.

The fact that it has not already happened is no guarantee that it will not happen. Look at all the easy money coming into gold. All those who have shifted money from real estate, mutual funds, pension funds, hedge funds and stocks are pouring it into gold. Gold ETFs are the fastest growing investment vehicles today. This is all real quick money, but can evaporate at the click of a key. Of course, governments such as China and India are also betting on gold and increasing their reserves. But then, whoever said governments can make no mistakes?

The intrinsic value of gold has not gone up from $255 to $1,424 in 10 years. Gold is not consumed heavily like oil or grain. Industrial use of gold is limited. Gold is the most recycled commodity. Of the annual production of 2,500 tonnes, about 50 per cent goes to make jewellery and it is almost entirely recycled. The rest goes to industrial and other uses, and even here the recycling rate is high. In other words, all that demand is artificial and can be deflated in no time. There is no need to have excess supply to lead to a price crash, unlike other products. The sheer fact that gold is only a hedge instrument and does not serve any practical use by itself, will negate the ‘there-is-no-new-supply' theory. Someone somewhere is watching for the perfect moment to disgorge the hoard, to create sudden panic and buy up following a crash. We have heard the script before.

There is no sign that a crash is going to come tomorrow, or for that matter next year or the year after. It may still go up for two or five or even 10 years. But crash it will, if we are to go by the economic history of boom and bust. And the higher it goes and the longer it stays there, the more painful the crash is going to be, especially for India.

Indians sit on an estimated 18,000 tonnes. India has always had the largest gold reserve with individuals. Imagine what will happen to millions of Indians if gold were to crash. A crash of gold will be the crash of the Indian economy.

Never have we had so much idle money chasing so little gold. Gold is losing its respect as the default and fail-safe asset class and becoming a speculative instrument. Mass hysteria is being built up. This shift of gold from being an item of passive wealth to an instrument of speculation is dangerous. It could be the beginning of the end of the faith in the last bastion of indestructible wealth. Gold is being talked up by crafty speculators and unsuspecting governments. Should not someone be worrying, especially in India?

(T. Balakrishnan is Additional Chief Secretary to the Government of Kerala. The views expressed here are his personal ones.)

source: The Hindu