International and Bilateral Issues

Deficit Effort Nears Collapse

The deficit-reduction supercommittee, stuck in a partisan deadlock, faces an almost certain collapse—raising the threat of disruptive military spending cuts and a resurgent public anger at Congress as it struggles with the basic tasks of governance.
the committee is expected to announce Monday that it failed to reach its mandated goal of writing a bipartisan bill to reduce deficits over the next 10 years by at least $1.2 trillion.
That expected failure injects a greater uncertainty into the nation's political and economic landscape heading into a volatile election year.

China launches two satellites: State media

China placed two satellites in orbit on Sunday, including a spacecraft that will collect and relay data for disaster relief efforts
The two satellites were successfully launched aboard a Long March carrier rocket, China's main space launch vehicle
The Chuangxin 1-03 satellite, developed by the Chinese Academy of Sciences, will collect and relay water conservation, hydrological and meteorological data, plus data for disaster relief efforts, the report said.
The Shiyan-4, developed by the Chinese Research Institute of Space Technology, is an experimental satellite which will study the earth's environment and test new space technologies
Sunday's launch comes after China's unmanned spacecraft Shenzhou VIII returned to Earth on Thursday after completing two space dockings that have pushed forward the nation's plan to build a space station by 2020.
Shenzhou VIII, which means "divine vessel"
China is expected to launch two more spacecraft next year to dock

Pakistan army on board trade liberalisation with India

Commerce minister Anand Sharma will travel to Pakistan in mid-February next year to take forward the already underway normalisation process, with Islamabad promising the most favoured nation (MFN) status to India and both sides promising last week to end their decades-old animosity by moving from a positive to a negative trading list like the rest of the world.
In the second decade of the 21st century, economics is politics. That is why, when the home secretaries of India and Pakistan meet next month, they will agree to significantly liberalise the anachronistic visa regime between the two countries.
It can now be confirmed that Pakistani businessmen have had huge influence in persuading their government, as well as the all-powerful army, to end the linkage between improving trade with India and talks on Kashmir.
Significantly, the Pakistan army, which dominates the decision-making process and has taken charge of foreign policy towards India and the US, is on board the trade liberalisation process with India.
In fact, a huge concession was also made last week when trade across the Line of Control in Kashmir was increased from two to four day
National Logistics Cell (NLC) in Lahore
Now, although Wikipedia describes the NLC as the “crisis management arm of the Pakistan government in relation to logistics emergencies,” and is headed by Major-General Junaid Rehmat since June 2010, it is widely rumoured to be a sister organisation of the Pakistan Army and the ISI.
NLC has already cornered 100 acres on the Pakistan side of the Wagah-Attari border where the integrated check-post is in the final stages of being built. When it is ready in a couple of months, it will be a state-of-the-art facility, where Pakistani and Indian trucks bearing fresh produce and goods like cement and textiles — items that Pakistan is desperate to trade with India — will be able to drive in, offload their goods and then drive back into their own countries.
In the wake of the deteriorating relationship with the US, the Pakistani leadership’s realisation that, in effect, it had no option but to open channels with India, was ironically underlined by the fact that Pakistani businessmen were telling US officials they were “very, very eager” to rebuild the economic relationship with India.
These NTBs include the compulsory certification of Pakistani cement, opacity of sanitary and phyto-sanitary concerns, testing and packaging of food products, customs and valuation procedures and most important, testing for the use of azodyes — a dye banned in India and Pakistan — in Pakistani textiles, as well as marking and labeling requirements in Pakistani ready-made garments.
Last week in Delhi, Pakistan’s commerce secretary reiterated Islamabad’s decision, saying the mandate for “full normalisation of bilateral trade relations” would be accompanied by its “meeting of all legal obligations.”
In other words, by February 2012, the “positive list” would give way to the “negative list”. By November-December 2012, the “negative list”, which allows trade at MFN tariffs, would give way to “preferential trade” where all goods could be traded — some at MFN tariff, and some even below MFN tariffs.
Aware that the breakthrough represented not only a huge increase in trade – from $7.5 billion at present ($2.5 billion official trade and $5 billion via Dubai) to $11 billion by 2012-end — officials from both sides said they were savouring the historical moment.

Wages inequality turns focus on executive pay

The average age at death among the people of the West End [of London] is 55 years; the average age at death among the people of the East End is 30 years.
We have come a long way since then but the gulf between rich and poor in the U.K. is once more becoming one of the most hotly debated issues of the day.
Look no further than the growing disparity in pay between Britain's business elite and the rest of the working population for evidence of what the Trades Union Congress (TUC) calls “the new inequality”.
There are now half a dozen specialist pay consultancies in the City (of London) whose sole job is to advise remuneration committees how much executives should be paid and how to structure their pay packages.
The pay consultancy industry has been spawned by an attempt by companies (under pressure from shareholders) to link pay with performance, but there is no discernible evidence of a connection between pay and performance.
A recent survey by Income Data Services found senior directors at FTSE-100 companies last year enjoyed a 49 per cent pay rise, earning on average 2.7 million pound sterling. That is 113 times the national average of 24,000 pound sterling for a worker in the private sector, where salaries have risen 3 per cent in the last year.
People are getting increasingly impatient, businesses have got to put their house in order, or risk solutions being imposed from above.
At least 10 staff representatives sit on director panels in Germany, where executive remuneration is a less emotive issue.

Assad assails Arab League decision

The embattled Syrian President Bashar al-Assad on Sunday vowed not to “submit'' to outside pressure and described the Arab League's decision to suspend Syria as a “pretext'' for western intervention.
He warned that any foreign military intervention would cause an “earthquake'' that would “shake'' the entire region.
If they are logical, rational and realistic, they shouldn't do it because the repercussions are very dire. Military intervention will destabilise the region as a whole, and all countries will be affected.
Mr. Assad blamed the violence in which hundreds of people, including Syrian soldiers, are reported to have been killed on “armed gangs'' and “militants''.

China's rural poverty falls but inequality rises, says white paper

The paper, the first released on poverty since 2001, attributed the steep decline to the effectiveness of a series of subsidies for China's farmers, including the removal of agricultural taxes and a new social security assistance programme.
Despite fast-declining rural poverty, the report also warned of new — and, analysts said, harder to address — developmental challenges as a result of increasing inequality between the countryside and cities.
The central government's spending on agriculture in this time rose from 214.42 billion yuan ($34 billion) in 2003 to 857.97 billion yuan ($136 billion) last year — an annual 22 per cent increase.
Another key measure behind the decline was the setting up of a nationwide rural social assistance system in 2007
The Chinese government's definition of poverty includes those who earn less than 1,274 yuan a year (or Rs. 10,192). The government's definition has been seen by some analysts as too low
The poverty and low-income lines, since the mid-1990s, were set by the government with the World Bank's help, and also took inflation into account
In 1981, when reforms were just beginning, poverty in rural China stood at 18.5 per cent.
The World Bank report identified the introduction of the Household Responsibility System in agriculture in the early 1980s, which replaced communes, and the subsequent emergence of Township and Village Enterprises, as a key reform.
Some measures which had helped bring growth, such as marketisation, had now left a legacy of rising health and education costs, particularly in rural areas.
A urban resident earns more than 3.3 times a rural one in China today, with the Gini income inequality index rising from 30.9 per cent in 1981 to 45.3 per cent in 2003.
The main reason for the enlarging rural-urban gap is the unbalanced development strategies adopted by Chinese government from the early 1950s which give priority to the development of heavy industries

IBSA gifts sports centre to Palestine

The IBSA (India-Brazil-South Africa) solidarity was on display in Ramallah, Palestine with leaders and officials from the three countries gifting a sports centre to the Palestinian Authority.
The sports centre is the first project completed through IBSA funding and two more IBSA-funded projects are in progress
India, along with Brazil and South Africa, has consistently supported Palestine's cause. In 1975, India was the first non-Arab state to recognise the Palestine Liberation Organisation and five years later gave full diplomatic recognition to its office in New Delhi. In 1988, India recognised the state of Palestine.
Mr. Ahamed said the issue of Palestine has taken a decisive turn after Mr. Abbas filed an application with United Nations Secretary General demanding Palestine's full membership.
Prime Minister Manmohan Singh's speech in the U.N. General Assembly that India has been steadfast in its support for the Palestinian people's struggle for a United State of Palestine with East Jerusalem as the capital
Later in the day, the Minister handed over a cheque of $1 million as India's annual contribution for 2011-12 to be utilised for food for 50 school days to 76,000 students attending U.N.-funded schools in Gaza.