Latest News Clips 2013.04.01

                        Bengo’s Latest News Clips                      2013.04.01

1.      Building on 'BRICS': The next emerging economies CNN    March 27, 2013

BRICS leaders (From L) India Prime minister Manmohan Singh, President of the People's Republic of China Xi Jinping, South Africa's President Jacob Zuma, Brazil's President Dilma Rousseff and Russian Federation President Vladimir Putin, pose for a family photo in Durban.

(CNN) -- As leaders of Brazil, Russia, India, China and South Africa convene in Durban, the term "BRICS" used to describe these rapidly growing economies is so last year; today everyone is talking about the "CIVETS."

Made up of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa -- these nations, some with sizable populations and others with a wealth of natural resources, could be the economic boomers of the next decade, according to John Bowler, director of Country Risk Service at the Economist Intelligence Unit.

Although unlikely to rival the economic might of India and China or the resources of Russia and Brazil, this motley crew of emerging markets make the CIVETS the next band of countries to profit from a shift in global power.

Bowler highlights oil-rich Indonesia as a growth story for the next decade in particular. With low levels of public debt and a population of more than 200 million people, the Southeast Asian nation posted growth of 6% in 2012, at a time when economic giants such as China and India slowed.

"Indonesia is a low-cost location so it's attracting investment that would have previously gone into China but because of wage demands that investment is going into Indonesia," he said.

Bowler also noted that Egypt has high growth potential despite trying to secure a critical $4.8 billion loan from the International Monetary Fund.

The country is mired in political turmoil following the outbreak of the Arab Spring two years ago, with Egyptian opposition politician Mohamed ElBaradei labelling the North African nation a "failed state" as the country remains divided over controversial President Mohamed Morsy.

"Eventually Egypt will modernize and follow the kind of path that Turkey has in reconciling its issues in society," Bowler added.

Other members of the CIVETS -- Colombia, Turkey and Vietnam -- all saw growth of more than 3% for 2012, according to IMF data, well above the U.S., U.K., Germany and the debt-ridden "PIGS" of Europe; Portugal, Ireland, Greece and Spain.

2.      What has been agreed in Cyprus? CNN    March 27, 2013

 (CNN) -- Cyprus has agreed to a €10 billion ($13B) European Union bailout after a frantic weekend of negotiations with European lenders, preventing the collapse of the island nation's financial sector in a deal that will likely mean huge losses for holders of large deposits at Cyprus' two biggest banks.

What are the terms of the deal?

Cyprus struck a deal with EU officials on a €10 billion aid package to shore up the country's banking sector. The plan will protect all deposits of less than €100,000, but is likely to impose a levy or "haircut" for account holders with more than €100,000 at the two biggest banks -- the Bank of Cyprus and Popular Bank of Cyprus -- according to CNN Money.

Popular Bank will be broken up immediately, and its viable assets will be integrated into the Bank of Cyprus. While the exact percentage of the "haircut" has not yet been determined, the levy on Popular Bank depositors alone will raise about €4.2 billion ($5.5B) towards the bailout deal, while shareholders and bondholders are likely to be wiped out.

As part of the program, Cyprus will also have to raise taxes on capital gains and companies, introduce structural reforms and privatize some state assets. It has also agreed to an independent audit of anti-money laundering efforts in the banking system.

EU officials had originally proposed a package that would have imposed a levy on all bank accounts in order to raise €5.8 billion ($7.5B) toward the deal. Account holders with more than €100,000 ($130,000) would have paid a 9.9% levy and those with smaller deposits 6.75%.

But the Cypriot parliament rejected the bailout offer due to public outrage over the levy, prompting fears of a run on the country's banks, which have been closed since March 16, and officials went back to the drawing board.

3.      Elite in China Face Austerity Under Xi’s Rule

The New York  March 27, 2013

BEIJING — Life for the almighty Chinese government official has come to this: car pools, domestically made wristwatches and self-serve lunch buffets.

In the four months since he was anointed China’s paramount leader and tastemaker-in-chief, President Xi Jinping has imposed a form of austerity on the nation’s famously free-spending civil servants, military brass and provincial party bosses. Warning that graft and gluttony threaten to bring down the ruling Communists, Mr. Xi has ordered an end to boozy, taxpayer-financed banquets and the bribery that often takes the form of a gift-wrapped Louis Vuitton bag.

While the power of the nation’s elite remains unchallenged, the symbols of that power are slipping from view. Gone, for now, are the freshly cut flowers and red-carpet ceremonies that used to greet visiting dignitaries. This month, military officers who arrived here for the annual National People’s Congress were instructed to share hotel rooms and bring their own toiletries.

“Car-pooling feels so good because it provides a way to bond and chat with each other while saving money and increasing efficiency,” one senior military official told the People’s Liberation Army newspaper.

Not everyone has been so embracing of the change. Last Tuesday, the country’s top disciplinary body dismissed six functionaries, including a neighborhood party chief who spent $63,000 to entertain 80 colleagues at a seaside resort, and a county official who marked the opening of new administrative offices by throwing a feast for 290 people.

The crackdown appears to be real, as far as it goes, which may not be very far. After a year of scandal that led to the toppling of a member of the Politburo, Bo Xilai, and numerous reports of widespread official corruption, Mr. Xi’s highly public campaign seems aimed at curtailing the most conspicuous displays of wealth by people in power. He has done little to tackle the concentrations of money and power in China’s state-directed economy that have allowed numerous members of the Chinese elite and their extended families to amass extravagant fortunes.

4.      The Sequester Hits the Reservation

The New York Times   2013.03.21

The Congressional Republicans who brought us the mindless budget cuts known as the sequester have shown remarkable indifference to life-sustaining government services, American jobs and other programs. So what do they make of the country’s commitments to American Indians, its longstanding obligations to tribal governments under the Constitution and treaties dating back centuries?

Very little, it seems. The sequester will impose cuts of 5 percent across the Indian Health Service, the modestly financed agency within the United States Department of Health and Human Services that provides basic health care to two million American Indians and native Alaskans. It is underfinanced for its mission and cannot tolerate more deprivation.

Here lies a little-noticed example of moral abdication. The biggest federal health and safety-net programs — Social Security, Medicaid, the Children’s Health Insurance Program, the Supplemental Nutrition Assistance Program, Supplemental Security Income, and veterans’ compensation and health benefits — are all exempt from sequestration. But the Indian Health Service is not.

The agency was supposed to be spared the worst of the automatic cuts; at least that is what its officials believed. Under a 1985 law that served as the model for the current sequester, annual cuts to appropriations for the Indian Health Service could not exceed 2 percent.

Even a cut of that amount is very bad news for the main health care provider for some of the poorest and sickest Americans, living in some of the most remote and medically underserved parts of the country. Like care for veterans, Indian health was supposed to be one area in which duty and compassion trumped cheapness.

The agency’s officials were braced for that level of cuts, but they were mistaken. The Office of Management and Budget interpreted the sequestration law to mean that the 2 percent cap did not apply to most of the Indian Health Service financing.