Price pressures remain the biggest worry for Asia, where high inflation is threatening to spoil the gains against poverty achieved over the last two decades, the Asian Development Bank said on Sunday.
"We are concerned that the the rising food and fuel prices will make dent in the fight against poverty," Rajat M. Nag, managing director general of the ADB, told Reuters in an interview on the sidelines of the World Economic Forum on East Asia meeting in Malaysia's capital.
The ADB has forecast Asian inflation at 5.1 percent for 2008, but Nag said it would probably be higher.
"Our forecast for 2008 is 5.1 percent and that will be the highest in a decade. This was done in April and we are updating, and I am sure the numbers will be probably higher," he said.
Asian currencies are weakening and asset markets are being strained on worries that rising inflation will soon hurt growth, investment and corporate earnings, and destabilise governments.
Asian policymakers are facing their toughest test since the 1997 financial crisis. Across the region, central banks are under pressure to tighten monetary policy to prevent $130-plus oil and soaring commodity prices from seeping into wages and other costs.
But governments fear politically-unpopular interest rate hikes could also curb growth, which is already under pressure as the U.S. economy sputters.
The ADB forecast 7.6 percent growth for the region in 2008, down from 8.7 percent last year, which was the highest in two decades.
"Growth this year will be lower than last year but still fairly attractive, with a slight uptick in 2009," said Nag.
But he repeated that inflation remained the region's biggest challenge.
"All of this could be endangered if the inflation issue is not handled. Inflation is the greatest worry."
He said Asian countries will have to think not only of food and fuel prices, but overall inflation levels.
"Basically you have got to look at headline inflation, and there it is important that both monetary and fiscal policies come down very very hard on inflation," said Nag.
But he refused to say whether he thought Asian governments and central banks have been too slow to tackle price pressures.
"Asia is certainly recognising the seriousness of the situation," he said, referring to recent steps by a number of central banks including a rate hike last week by the Reserve Bank of India.
"I think that stance has to be maintained and aggressively pursued."
James W. Adams, the World Bank's vice president for East Asia and Pacific, agreed that inflation was the biggest worry.
"It complicates policy making. When you have price stability you actually have more flexibility in terms of what instruments you can use and how aggressively you have to use them," Adams told reporters.
"The other concern is that inflation is a tax on the poor," he said. "The risk is because they are so heavily dependent particularly on the food budget, that this will reduce the prosperity and wealth of a significant percentage of the population."
FISCAL MEASURES
ADB's Nag stressed the need for monetary policy to be supported by fiscal measures to dampen inflationary expectations, calling for a more organised way of helping the poor cope with rising prices.
"Governments have to look at providing directed cash or income support to the most vulnerable rather than broad general subsidies," Nag said.
He said such subsides could be counter productive in the long- run, and urged governments not to impose price controls or export bans on commodities.
Almost a billion people in the region are acutely vulnerable to rising food prices, including 600 million who are living on less than a dollar a day, he said.
"Our concern is that the gains against poverty that Asia has made can start to unravel. And the focus has to be therefore on the price story, and it cannot be done by imposing administrative controls," he said.
"The era of cheap food is over but that does not necessarily means that Asia's success against poverty is over. It means that we really have to focus on these critical constraints."
Sunday, June 15, 2008
Life in smaller cities gets dearer too
Metros are not the only expensive places to live in as consumers have seen the retail prices of most essential food items having soared by up to 80% in the last four years.
The price rise in five non-metro cities in different regions of the country -- Bangalore, Ahmedabad, Hyderabad, Lucknow, Bhubaneswar and Shimla -- are either more or at least in line with that of four metropolis.
The trend seen in the retail prices, based on an analysis of data available with the Ministry of Consumer Affairs, come amid the wholesale price-based inflation figure having surged to its highest level in seven years at 8.75 per cent.
Besides, the economists expect the inflation figure to soon touch double-digit mark at 10 per cent, because of recent hike in fuel prices, which could further push up the retail prices.
Between May 24, 2004 and June 12, 2008, rice prices have gone up by over 73 per cent in Ahmedabad at Rs 15.25 per kg, while those in Shimla rose by about 63 per cent, Lucknow by 53 per cent, Bangalore by 50 per cent, Bhubaneswar by 44 per cent and Hyderabad by 30 per cent.
In the four metros, rice prices rose by 25-52 per cent.
Wheat prices have spiralled by over 57 per cent to Rs 11 a kg in Lucknow, by 25 per cent in Bangalore, 30 per cent in Hyderabad and 21 per cent in Ahmedabad.
In four metros, wheat prices have gone up in the range of 42-48 per cent. Mumbai witnessed the highest rise of Rs 5 a kg to Rs 15.5.
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The price rise in five non-metro cities in different regions of the country -- Bangalore, Ahmedabad, Hyderabad, Lucknow, Bhubaneswar and Shimla -- are either more or at least in line with that of four metropolis.
The trend seen in the retail prices, based on an analysis of data available with the Ministry of Consumer Affairs, come amid the wholesale price-based inflation figure having surged to its highest level in seven years at 8.75 per cent.
Besides, the economists expect the inflation figure to soon touch double-digit mark at 10 per cent, because of recent hike in fuel prices, which could further push up the retail prices.
Between May 24, 2004 and June 12, 2008, rice prices have gone up by over 73 per cent in Ahmedabad at Rs 15.25 per kg, while those in Shimla rose by about 63 per cent, Lucknow by 53 per cent, Bangalore by 50 per cent, Bhubaneswar by 44 per cent and Hyderabad by 30 per cent.
In the four metros, rice prices rose by 25-52 per cent.
Wheat prices have spiralled by over 57 per cent to Rs 11 a kg in Lucknow, by 25 per cent in Bangalore, 30 per cent in Hyderabad and 21 per cent in Ahmedabad.
In four metros, wheat prices have gone up in the range of 42-48 per cent. Mumbai witnessed the highest rise of Rs 5 a kg to Rs 15.5.
Comment Email Article Print Article
Life in smaller cities gets dearer too
Metros are not the only expensive places to live in as consumers have seen the retail prices of most essential food items having soared by up to 80% in the last four years.
The price rise in five non-metro cities in different regions of the country -- Bangalore, Ahmedabad, Hyderabad, Lucknow, Bhubaneswar and Shimla -- are either more or at least in line with that of four metropolis.
The trend seen in the retail prices, based on an analysis of data available with the Ministry of Consumer Affairs, come amid the wholesale price-based inflation figure having surged to its highest level in seven years at 8.75 per cent.
Besides, the economists expect the inflation figure to soon touch double-digit mark at 10 per cent, because of recent hike in fuel prices, which could further push up the retail prices.
Between May 24, 2004 and June 12, 2008, rice prices have gone up by over 73 per cent in Ahmedabad at Rs 15.25 per kg, while those in Shimla rose by about 63 per cent, Lucknow by 53 per cent, Bangalore by 50 per cent, Bhubaneswar by 44 per cent and Hyderabad by 30 per cent.
In the four metros, rice prices rose by 25-52 per cent.
Wheat prices have spiralled by over 57 per cent to Rs 11 a kg in Lucknow, by 25 per cent in Bangalore, 30 per cent in Hyderabad and 21 per cent in Ahmedabad.
In four metros, wheat prices have gone up in the range of 42-48 per cent. Mumbai witnessed the highest rise of Rs 5 a kg to Rs 15.5.
Comment Email Article Print Article
The price rise in five non-metro cities in different regions of the country -- Bangalore, Ahmedabad, Hyderabad, Lucknow, Bhubaneswar and Shimla -- are either more or at least in line with that of four metropolis.
The trend seen in the retail prices, based on an analysis of data available with the Ministry of Consumer Affairs, come amid the wholesale price-based inflation figure having surged to its highest level in seven years at 8.75 per cent.
Besides, the economists expect the inflation figure to soon touch double-digit mark at 10 per cent, because of recent hike in fuel prices, which could further push up the retail prices.
Between May 24, 2004 and June 12, 2008, rice prices have gone up by over 73 per cent in Ahmedabad at Rs 15.25 per kg, while those in Shimla rose by about 63 per cent, Lucknow by 53 per cent, Bangalore by 50 per cent, Bhubaneswar by 44 per cent and Hyderabad by 30 per cent.
In the four metros, rice prices rose by 25-52 per cent.
Wheat prices have spiralled by over 57 per cent to Rs 11 a kg in Lucknow, by 25 per cent in Bangalore, 30 per cent in Hyderabad and 21 per cent in Ahmedabad.
In four metros, wheat prices have gone up in the range of 42-48 per cent. Mumbai witnessed the highest rise of Rs 5 a kg to Rs 15.5.
Comment Email Article Print Article
PE deals touch $6.39bn in so far this yr
Downturn in the world economies notwithstanding, India is witnessing increasing number of private equity deals with the total value touching $6.39 billion so far this year.
PE deals in the country have fared well since the beginning of this year despite global credit crunch, high oil prices, inflation among others.
"The total number of PE deals during the first five months of 2008 stands at 170, with an announced value of $6.39 bn as against 159 deals amounting to $4.97 bn during the corresponding period in 2007," global consulting major Grant Thornton said.
Meanwhile, another global deal tracking firm Zephyr said India is among the top 10 countries in terms of value of private equity deals across the world.
India Inc witnessed the announcement of $ 640 million worth of PE deals in May this year, a whopping increase of over 603 per cent over last month figure while 1,180 per cent jump from corresponding period last year, Zephyr said in its latest report.
In April 2008, $ 91 million worth of PE deals were announced, it added.
Meanwhile, as per data compiled by Grant Thornton, the total number of PE deals announced during May stood at 14 with an announced value of $1.45 billion as against 32 deals amounting to $0.56 billion in the month of April this year.
PE deals in the country have fared well since the beginning of this year despite global credit crunch, high oil prices, inflation among others.
"The total number of PE deals during the first five months of 2008 stands at 170, with an announced value of $6.39 bn as against 159 deals amounting to $4.97 bn during the corresponding period in 2007," global consulting major Grant Thornton said.
Meanwhile, another global deal tracking firm Zephyr said India is among the top 10 countries in terms of value of private equity deals across the world.
India Inc witnessed the announcement of $ 640 million worth of PE deals in May this year, a whopping increase of over 603 per cent over last month figure while 1,180 per cent jump from corresponding period last year, Zephyr said in its latest report.
In April 2008, $ 91 million worth of PE deals were announced, it added.
Meanwhile, as per data compiled by Grant Thornton, the total number of PE deals announced during May stood at 14 with an announced value of $1.45 billion as against 32 deals amounting to $0.56 billion in the month of April this year.
Ragging may become a thing of the past
First year students can hope to enter campuses without the fear of ragging if stringent measures suggested by an expert panel are implemented. With the new academic session set to begin soon, various regulatory bodies like University Grants Commission (UGC) and All India Council for Technical Education (AICTE) have asked the institutions to take necessary measures to check any form of ragging on their campuses.
While the UGC has issued a circular to all universities to instruct the colleges to strictly follow the measures suggested by the Raghavan panel, the AICTE has issued advertisements in newspapers for the purpose. Besides warning the institutions that their approval would be scrapped if any case of ragging was reported, the AICTE has asked students, parents and the public to report to it instances of ragging in any form in institutions imparting technical education.
The Raghavan committee set up by the apex court to monitor the measures being taken to prevent ragging in higher educational institutions has suggested 'zero tolerance' towards ragging. The committee, headed by former CBI chief K Raghavan, asked the statutory regulatory bodies to direct educational institutions to incorporate in admission notices appropriate messages in this regard.
Noting that ragging lowered the standards of higher education, the committee felt that release of grants under various schemes of the UGC should be linked with the compliance of Supreme Court directives by the institutions
While the UGC has issued a circular to all universities to instruct the colleges to strictly follow the measures suggested by the Raghavan panel, the AICTE has issued advertisements in newspapers for the purpose. Besides warning the institutions that their approval would be scrapped if any case of ragging was reported, the AICTE has asked students, parents and the public to report to it instances of ragging in any form in institutions imparting technical education.
The Raghavan committee set up by the apex court to monitor the measures being taken to prevent ragging in higher educational institutions has suggested 'zero tolerance' towards ragging. The committee, headed by former CBI chief K Raghavan, asked the statutory regulatory bodies to direct educational institutions to incorporate in admission notices appropriate messages in this regard.
Noting that ragging lowered the standards of higher education, the committee felt that release of grants under various schemes of the UGC should be linked with the compliance of Supreme Court directives by the institutions
At Reuters Summit, McCain seen as best choice for economy
Republican presidential candidate John McCain's tax policies have given him an edge as the better man for the economy, various Wall Street experts said at this week's Reuters Investment Outlook Summit.
But, against a backdrop of job losses and deteriorating home values, Wall Street is backing McCain's Democratic rival, Barack Obama with cold, hard cash.
McCain plans to extend the Bush administration's tax cuts, eliminate the Alternative Minimum Tax, and slash corporate taxes. Obama, who has derided the Arizona senator's plans, has pledged to raise taxes on the wealthy and introduce a broad range of refundable tax credits.
"My personal opinion is I would argue that McCain is probably the better candidate for the economy and that is more or less because of his tax policies," James Caron, head of global rates research at investment bank Morgan Stanley in New York, said at the Reuters Summit this week.
"In this environment that we're in right now, the last thing you want to have is higher taxes and taking money out of the consumers' pockets," he added.
David Bianco, chief U.S. strategist at UBS Investment Research, told the summit that Wall Street would welcome McCain with open arms. "My view is that McCain is better for the market," Bianco said.
"The market will respond to McCain corporate tax cuts," said participant Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut.
Wall Street may like McCain but it is betting on the Democratic senator from Illinois.
But, against a backdrop of job losses and deteriorating home values, Wall Street is backing McCain's Democratic rival, Barack Obama with cold, hard cash.
McCain plans to extend the Bush administration's tax cuts, eliminate the Alternative Minimum Tax, and slash corporate taxes. Obama, who has derided the Arizona senator's plans, has pledged to raise taxes on the wealthy and introduce a broad range of refundable tax credits.
"My personal opinion is I would argue that McCain is probably the better candidate for the economy and that is more or less because of his tax policies," James Caron, head of global rates research at investment bank Morgan Stanley in New York, said at the Reuters Summit this week.
"In this environment that we're in right now, the last thing you want to have is higher taxes and taking money out of the consumers' pockets," he added.
David Bianco, chief U.S. strategist at UBS Investment Research, told the summit that Wall Street would welcome McCain with open arms. "My view is that McCain is better for the market," Bianco said.
"The market will respond to McCain corporate tax cuts," said participant Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut.
Wall Street may like McCain but it is betting on the Democratic senator from Illinois.
15 militants killed in search for Afghan prisoner escapees
Afghan and coalition forces killed more than 15 insurgents and captured five while searching for militants who escaped in a daring jail-break last week, the U.S. military said Sunday.
Militants used explosive-laden trucks to destroy the walls of the Afghan prison.
Officials have not yet confirmed whether the insurgents who were killed or captured in the Saturday raid in Kandahar province were part of the nearly 400 Taliban militants who escaped from a Kandahar prison on Friday.
A U.S. military statement said the insurgents, who were holed up in a farming compound west of Rawonay, fired at troops who then retaliated with an air strike.
Authorities continued to search for the escaped prisoners Sunday. Afghan security forces have said looking for them will be tough in some areas, if not impossible in others. The Taliban is entrenched in the region, which is replete with militants' hideouts. The militants may have gone to two regions of Kandahar province with a large Taliban presence -- Maiwand and Zherai districts.
The incident, President Hamid Karzai told reporters Sunday, "is indicative of the challenges we still have, indicative of the weakness that we still have.
"Therefore it's all the more reason for us to work harder and to keep building Afghan institutions and Afghan intelligence and be a lot more steadfast in our resolve in confronting terrorism."
The Taliban militants escaped from the prison Friday during a planned commando-style attack. Militants used suicide truck bombs loaded with about two tons of explosives to blast holes in the mud brick walls of the Soviet-era prison, a Taliban spokesman said. Watch how Afghan prisoners escaped from prison »
A gun and rocket battle between the militants and prison guards lasted several hours and ended with dozens of militants rushing inside on motorcycles to free all prisoners inside -- including the nearly 400 Taliban fighters, the Taliban spokesman said.
The prison, one of the most notorious in Afghanistan, held a number of arrested Taliban leaders. Several had recently embarked on a hunger strike.
Police sources say the strike freed a combination of suicide bombers and cell leaders who had been captured over the past six years in various combat operations targeting the Taliban.
There were 1,059 prisoners in the prison at the time of the attack and 167 of them remain in the prison, the second largest in the country and controlled by the Afghan government.
Analysts -- who say the effort amounts to a huge psychological victory for the Taliban in southern Afghanistan -- note that this was the latest of three commando-style attacks in the country in recent months. The attacks reflect the sophistication of the militants and efforts to win the hearts and minds of the Afghan citizenry.
They include the attempted assassination in April of Karzai at a military ceremony and the strike on the five-star Serena Hotel in Kabul. Both are suspected as al Qaeda jobs as well.
The al Qaeda terror network attacked the United States Sept. 11, 2001, while during the Taliban's rule over Afghanistan. A U.S.-led invasion toppled the Taliban government, but the militant group developed into a potent insurgency.
The incident comes during as violence rages in Afghanistan's southern provinces, a major front in the fight between NATO-led troops and the Taliban
Militants used explosive-laden trucks to destroy the walls of the Afghan prison.
Officials have not yet confirmed whether the insurgents who were killed or captured in the Saturday raid in Kandahar province were part of the nearly 400 Taliban militants who escaped from a Kandahar prison on Friday.
A U.S. military statement said the insurgents, who were holed up in a farming compound west of Rawonay, fired at troops who then retaliated with an air strike.
Authorities continued to search for the escaped prisoners Sunday. Afghan security forces have said looking for them will be tough in some areas, if not impossible in others. The Taliban is entrenched in the region, which is replete with militants' hideouts. The militants may have gone to two regions of Kandahar province with a large Taliban presence -- Maiwand and Zherai districts.
The incident, President Hamid Karzai told reporters Sunday, "is indicative of the challenges we still have, indicative of the weakness that we still have.
"Therefore it's all the more reason for us to work harder and to keep building Afghan institutions and Afghan intelligence and be a lot more steadfast in our resolve in confronting terrorism."
The Taliban militants escaped from the prison Friday during a planned commando-style attack. Militants used suicide truck bombs loaded with about two tons of explosives to blast holes in the mud brick walls of the Soviet-era prison, a Taliban spokesman said. Watch how Afghan prisoners escaped from prison »
A gun and rocket battle between the militants and prison guards lasted several hours and ended with dozens of militants rushing inside on motorcycles to free all prisoners inside -- including the nearly 400 Taliban fighters, the Taliban spokesman said.
The prison, one of the most notorious in Afghanistan, held a number of arrested Taliban leaders. Several had recently embarked on a hunger strike.
Police sources say the strike freed a combination of suicide bombers and cell leaders who had been captured over the past six years in various combat operations targeting the Taliban.
There were 1,059 prisoners in the prison at the time of the attack and 167 of them remain in the prison, the second largest in the country and controlled by the Afghan government.
Analysts -- who say the effort amounts to a huge psychological victory for the Taliban in southern Afghanistan -- note that this was the latest of three commando-style attacks in the country in recent months. The attacks reflect the sophistication of the militants and efforts to win the hearts and minds of the Afghan citizenry.
They include the attempted assassination in April of Karzai at a military ceremony and the strike on the five-star Serena Hotel in Kabul. Both are suspected as al Qaeda jobs as well.
The al Qaeda terror network attacked the United States Sept. 11, 2001, while during the Taliban's rule over Afghanistan. A U.S.-led invasion toppled the Taliban government, but the militant group developed into a potent insurgency.
The incident comes during as violence rages in Afghanistan's southern provinces, a major front in the fight between NATO-led troops and the Taliban
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