By Mosharraf Zaidi
Pakistan is not going to default, because nobody will let it. That's too bad. Don't let the "economists" scare you. Default sounds like a dark, scary, doomsday scenario. Sovereign default sounds worse, like God's curse itself. It is not. "Sovereign" is the fancy term for country, used by the same loan sharks that milk pensioners to fatten their year-end bonuses (and who brought you Wall Street Meltdown 2008). Sovereign default is simply a country not making its loan repayments on time. It has happened to plenty of countries. They are all still around. Ex-bankers and former IMF employees will never advise Pakistan to default because to do so would be counter-intuitive. It would be like expecting the PPP to undertake land reforms, or the Jamaat-e-Islami to be consistent about anything. Advising Pakistan to default would represent an existential crisis worse than sovereign default. People would be forced to revisit the premise of their entire careers. We can't have that. So instead, we have experts from all around the world wringing their hands, loosening their ties and extolling the virtues of the "bitter pill" of yet another IMF programme. The purpose? To avoid the "dreaded" default, at all costs. Why is default such a "scary" thing, and why do countries go to extraordinary lengths to avoid default? Countries try to avoid default for four reasons. First, countries try to avoid default to save the country's reputation as a borrower in good standing--which means that they want to continue to borrow at rates that are favourable to them. Second, countries try to avoid default to save their ability to participate in international trade freely--which means they fear having sanctions imposed on them for being poor managers of their affairs. Third, countries try to avoid default to protect domestic banking and financial system--which means in essence that they want to protect the rich, because there aren't many poor folks with bank accounts. And finally, the fourth reason countries try to avoid default is to save the government of the day from the disgrace of having defaulted. Eduardo Borensztein and Ugo Panizza published an IMF working paper earlier this month that exposes one of the worst kept secrets in international development. They conclude that among all four of these reasons to avoid default, the most compelling, based on the evidence, is politics. They conclude that "The political consequences of a debt crisis seem to be particularly dire for incumbent governments and finance ministers". In short, governments choose not to default because it is the politically expedient thing to do. The actual economic costs of defaulting, Borenzstein and Panizza conclude, are simply not that high. Moreover, another paper earlier this year (by yet another IMF economist, Ali Alichi), suggests that the only real reason that countries repay the sovereign debt that they owe is to continue to be able to borrow money. In short, Pakistan is trying to avoid defaulting so that the PPP government can stay in power, and so that while it stays in power, it can continue to borrow money. The real question here is: where is all the money going and why does Pakistan need to keep borrowing it? Most of the money is going to debt-servicing and to defence. The traditional response to unsustainable expenditure in Pakistan is to call for a cut in defence spending, while continuing to find a way to pay off Pakistan's loans. No one ever actually explains what they mean by cutting defence spending, which is why the conversation begins with a request to cut the defence budget, meanders into the patriotism of those demanding the cut, and ends with a straight-faced refusal. No one expects Pakistan to compromise its national security, but it is not unreasonable to explore more efficient ways of securing the nation and the national interest. Far from a national conversation about spending priorities however, no one has gone so far as to even suggest a more traditional and hawkish view, for example, that the war on terror being waged by Pakistan's soldiers needs all the financing it can get, and that Pakistan's debtors will have to wait. An even more refreshing case to make would be to suggest that both debt servicing and national security are major drags on current and future generations, and that they represent much lower priorities than building infrastructure, fixing the police and delivering real education. What would a Pakistani government that was committed to those priorities look like? For starters it would stop hiring poorly qualified political workers to stack the deck for future election campaigns. Forget hiring another ten thousand jiyalas as teachers, to ruin another generation of children. Let's face it, Pakistan cannot grow teachers on trees, it doesn't have any teachers. It has to go out and hire the best Indonesian, Turkish, and Korean teachers. It has to bring them to Pakistan and put them to work. Pay them real salaries. Hire the Emiratis that have designed Sheikh Mohammad's infrastructure revolution to do the same thing to Karachi. Then go out and hire every willing CBM, FAST, GIKI, and IBA graduate out there, and make cops and municipal administrators out of them. Take ten of those supercops, give them Blackberrys, night-vision goggles, Humvees and some ammo and put them outside every school. Forget the entourages. Protect the schools. Take the municipal administrators and tell them to get running water to those schools. If there's no well, and no groundwater, teach them how to negotiate deals, so they can buy truckloads of mineral water for the students, and their mothers. Get those kids and their families some clean water. Make sure there are nurses and doctors at each school. Pay every Aga Khan University Medical School graduate twice what they would make as residents at Mount Sinai or Beth Israel. Teach the kids their native languages, drop the grammatically dreadful and aesthetically murderous fake American accents and bring back the Pakistani accent to film, television, radio and to dinner parties. That's the kind of expenditure that would explain indebting future generations of Pakistanis. It would explain deepening the pool of debt that Pakistan is drowning in. It would explain the helplessness currently being feigned by economic and political policy makers. In short, if Pakistan was borrowing money to pay for this kind of a social program, it would be hard to argue against it. Instead, Pakistan is borrowing money to throw it into the same black hole that the money has been going into for at least a generation now. What has Pakistan got to show for almost forty years of sustained debt growth? Illiterate fanatics who can't pronounce the name of God are taking over Swat because the courts don't work. Drug lords and criminals posing as religious vigilantes are taking over NWFP because the cops don't work, can't work, and aren't allowed to work. The water in the taps all over the country is toxic. The teachers at the school can barely read. The ones that can spend more time in Lahore, Peshawar, Quetta and Karachi, at the civil secretariat looking for a transfer, than teaching their students whatever little they know. The students are at home watching Sanju Baba kill bad guys, and Jon Abraham seduce bad girls. The mullahs are making speeches they don't understand, to crowds that aren't listening, until they bring on the hate. Then everybody listens. The uncles and aunties think cheap Broadway rip-offs with racy costumes constitute a culture renaissance. Little girls in rural Pakistan meanwhile are being traded by remorseless jirgas, in the name of honour. The culture vultures hate Arabic, love Punjabi, and are addicted to broken English. The hawks want beef, the doves want bhindi. And bankers want to loan Pakistan more money to finance the whole rot all over again. It's time for Pakistan to start spending its money on people servicing, instead of debt servicing. Bigger and more successful countries have done this before including Indonesia, Russia, and Argentina. Pakistan loves to ape other countries. Now is its chance. Time to default.
Tuesday, October 28, 2008
Monday, October 20, 2008
Bollywood Craze
A Pakistani teenager's craze for a career in Bollywood has landed him in an Indian jail and his worried parents are appealing for his release on humanitarian grounds.
Nasir Sultan, a Class 10 student and a diehard fan of the Bollywood superstar Shahrukh Khan, crossed over to India illegally to try and join the film industry. After reaching Punjab in India, he called his parents in the North West Frontier Province to say he was in the neighbouring country. Fifteen minutes later his parents got another call to say that their son had been arrested. Sultan's parents, who hail from Chukiatan, a small town of Dir district in NWFP, are now running from pillar to post to secure his release. Like most Pakistani boys of his age, Sultan was an avid Bollywood fan and was fascinated by the many stunts in Hindi films that he hoped to excel at too. On August 16, Sultan left home for school wearing his uniform and carrying his schoolbag but instead crossed the border.
Two days later, his father Sultan Zareen, who works at a petrol pump, got a call from Sultan, who said he was on his way to Mumbai. This was followed soon after by the news of his arrest.
Sultan is being held in Faridkot Jail for the past two months. "I don't know what to do to secure his release as he is in another country where I have no influence or resources to use for winning his release," Zareen told The News daily. Zareen said his wife was depressed and the Indian Government should release his son on humanitarian ground.
Nasir Sultan, a Class 10 student and a diehard fan of the Bollywood superstar Shahrukh Khan, crossed over to India illegally to try and join the film industry. After reaching Punjab in India, he called his parents in the North West Frontier Province to say he was in the neighbouring country. Fifteen minutes later his parents got another call to say that their son had been arrested. Sultan's parents, who hail from Chukiatan, a small town of Dir district in NWFP, are now running from pillar to post to secure his release. Like most Pakistani boys of his age, Sultan was an avid Bollywood fan and was fascinated by the many stunts in Hindi films that he hoped to excel at too. On August 16, Sultan left home for school wearing his uniform and carrying his schoolbag but instead crossed the border.
Two days later, his father Sultan Zareen, who works at a petrol pump, got a call from Sultan, who said he was on his way to Mumbai. This was followed soon after by the news of his arrest.
Sultan is being held in Faridkot Jail for the past two months. "I don't know what to do to secure his release as he is in another country where I have no influence or resources to use for winning his release," Zareen told The News daily. Zareen said his wife was depressed and the Indian Government should release his son on humanitarian ground.
Wednesday, October 15, 2008
Canada Votes
Canadians have chosen "slow and steady," giving Prime Minister Stephen Harper and his Conservatives a tighter hold on minority government as the country braces for a looming economic downturn. Harper, 49, was able to make vital gains in Ontario, including big victories in the 905 region, but campaign missteps in Quebec kept his long-sought majority agonizingly out of reach and leaves him facing a divided Parliament. But last night, Harper said Conservatives "hold out our hand to all members of Parliament" in order to "protect Canada's economy.
"This is a time for us all to put aside political differences and partisan considerations and to work cooperatively for the benefit of Canada," Harper told supporters at Calgary's Telus Convention Centre. The night proved a bitter disappointment for Liberal Leader Stéphane Dion, 53, who failed to sell voters on his leadership or his controversial carbon tax and now faces an almost certain challenge to his leadership.
Dion told supporters early today that he will co-operate with the government in dealing with the economy. "We Liberals will do our part responsibly to make sure this Parliament works," he said.
"I assured (Harper) that my top priority will be the economy."
Liberals lost seats across Atlantic Canada and in the one-time stronghold of Ontario, where they gave up seats to the Conservatives in ridings such as Oakville and Halton, where high-profile Liberal Garth Turner lost to Conservative Lisa Raitt.
Dion, in his first campaign as a party leader, said he wouldn't quit if Liberals lost the election. But Tuesday night's result – the worst showing for the party in at least 20 years – makes it doubtful that Liberals are willing to give Dion, who struggled with English and his ability to connect with voters, a second chance.
Liberals Bob Rae and Michael Ignatieff – Dion's rivals for the party leadership – both won their Toronto seats last night, ensuring that leadership speculation remains alive.
NDP Leader Jack Layton, 58, improved his party's standings, winning seats in Newfoundland and Northern Ontario. Layton campaigned to be prime minister, but in reality aspired to replace the Liberals as official Opposition. He lost on both counts, but yesterday's results give the NDP a stronger voice in Parliament.
"We didn't quite get the gold medal this election but we did give it our best shot," Layton told supporters gathered last night at a club on Toronto's waterfront. And he noted that the election did not give Harper a blank cheque. "Canadians have elected a minority Parliament. No party has a mandate to implement an agenda without agreement from the other parties," said Layton, whose wife Olivia Chow won in the riding of Trinity-Spadina.
In Quebec, Bloc Québécois Leader Gilles Duceppe, 61, turned around his campaign and held onto seats, thanks to the Conservative missteps in the province, especially a proposed crackdown on young offenders, as well as arts cuts.
The result marks Canada's third minority government in four years. And it means the Conservatives will continue to face three progressive-leaning parties in Parliament, which could force Harper to strike a more conciliatory approach to his dealings with political rivals.
It could also mean that a question mark hangs over a Conservative campaign pledge to crack down on teen offenders, given the strong opposition to it from the other parties.
What started out as a sleeper campaign turned dramatic as wild stock market swings, global bank failures and recession fears thrust the economy into the spotlight.
In the end, voters opted for Harper's modest platform. But they kept the Conservatives on a short leash as they were unwilling again to trust them with a majority government, something that had seemed within easy reach during the 37-day campaign.
The Prime Minister gambled with his election call, opting to go to the polls a full year before the date set by his party's own legislation for the next vote. He told Canadians that Parliament was at an impasse and that he needed a new mandate from voters.
While Harper was able to deliver new seats at the expense of the Liberals – and make critical gains in Ontario – the result is sure to fuel some questions within Conservative ranks about Harper's leadership. For the third time he has failed to deliver a majority, despite the best possible scenario this time – a weak rival trying to sell voters on a new tax.
Conservative cabinet minister Diane Ablonczy insisted the party would be happy with the results, even though it fell about a dozen seats short of the 155 seats needed for a majority.
"We're very pleased with the very strong mandate we received tonight. I think you'll see a Parliament that works much better going forward," she told CBC News Tuesday night.
Harper, who must form a new cabinet in the coming weeks, is already facing opposition calls to return Parliament quickly to deal with the economic crisis and bring forward an economic update on the state of the country's financial books. Green Leader Elizabeth May, 54, fell short as well last night, losing to her Conservative rival Peter MacKay in the Nova Scotia riding of Central Nova.
The Greens failed to elect any of their candidates. Still, May's high-profile run gave new publicity to the party, thanks largely to her successful fight to win a spot in the televised leaders' debates, where she impressed many Canadians with her performance.
Harper launched the election on Sept. 7 determined to frame the ballot box issue as a question of whom Canadians should trust to lead the nation in troubled times.
In the end, the economy – and stomach-churning stock market tumbles that saw the Toronto index plunged more than 20 per cent during the campaign – stole his thunder and became the story of the campaign as all leaders pitched themselves as the best stewards to lead the nation.
The Prime Minister preached a "steady-as-she-goes" approach but Canadians scolded Harper for his initial lack of empathy for their worries over sagging investment portfolios and the future of their jobs. At one point, he even said there were some "great buying opportunities" as a result of the downtown, a comment that drew complaints that he was tone-deaf to the concerns of Canadians. The opposition parties jumped on the economy, charging that Harper's modest platform was a "do-nothing" recipe. Dion used the French-language televised debate to release his own five-point plan to bolster the economy. Layton drew attention to the loss of good-paying manufacturing jobs. As well, Conservative cuts to arts and culture funding – and Harper's dismissive response – cost the party precious seats in Quebec, where the Conservatives had carefully courted voters in the hopes of making gains.
The result now ensures that the threat of another election will continue to hang over the nation.
http://www.thestar.com/federalelection/article/517664
"This is a time for us all to put aside political differences and partisan considerations and to work cooperatively for the benefit of Canada," Harper told supporters at Calgary's Telus Convention Centre. The night proved a bitter disappointment for Liberal Leader Stéphane Dion, 53, who failed to sell voters on his leadership or his controversial carbon tax and now faces an almost certain challenge to his leadership.
Dion told supporters early today that he will co-operate with the government in dealing with the economy. "We Liberals will do our part responsibly to make sure this Parliament works," he said.
"I assured (Harper) that my top priority will be the economy."
Liberals lost seats across Atlantic Canada and in the one-time stronghold of Ontario, where they gave up seats to the Conservatives in ridings such as Oakville and Halton, where high-profile Liberal Garth Turner lost to Conservative Lisa Raitt.
Dion, in his first campaign as a party leader, said he wouldn't quit if Liberals lost the election. But Tuesday night's result – the worst showing for the party in at least 20 years – makes it doubtful that Liberals are willing to give Dion, who struggled with English and his ability to connect with voters, a second chance.
Liberals Bob Rae and Michael Ignatieff – Dion's rivals for the party leadership – both won their Toronto seats last night, ensuring that leadership speculation remains alive.
NDP Leader Jack Layton, 58, improved his party's standings, winning seats in Newfoundland and Northern Ontario. Layton campaigned to be prime minister, but in reality aspired to replace the Liberals as official Opposition. He lost on both counts, but yesterday's results give the NDP a stronger voice in Parliament.
"We didn't quite get the gold medal this election but we did give it our best shot," Layton told supporters gathered last night at a club on Toronto's waterfront. And he noted that the election did not give Harper a blank cheque. "Canadians have elected a minority Parliament. No party has a mandate to implement an agenda without agreement from the other parties," said Layton, whose wife Olivia Chow won in the riding of Trinity-Spadina.
In Quebec, Bloc Québécois Leader Gilles Duceppe, 61, turned around his campaign and held onto seats, thanks to the Conservative missteps in the province, especially a proposed crackdown on young offenders, as well as arts cuts.
The result marks Canada's third minority government in four years. And it means the Conservatives will continue to face three progressive-leaning parties in Parliament, which could force Harper to strike a more conciliatory approach to his dealings with political rivals.
It could also mean that a question mark hangs over a Conservative campaign pledge to crack down on teen offenders, given the strong opposition to it from the other parties.
What started out as a sleeper campaign turned dramatic as wild stock market swings, global bank failures and recession fears thrust the economy into the spotlight.
In the end, voters opted for Harper's modest platform. But they kept the Conservatives on a short leash as they were unwilling again to trust them with a majority government, something that had seemed within easy reach during the 37-day campaign.
The Prime Minister gambled with his election call, opting to go to the polls a full year before the date set by his party's own legislation for the next vote. He told Canadians that Parliament was at an impasse and that he needed a new mandate from voters.
While Harper was able to deliver new seats at the expense of the Liberals – and make critical gains in Ontario – the result is sure to fuel some questions within Conservative ranks about Harper's leadership. For the third time he has failed to deliver a majority, despite the best possible scenario this time – a weak rival trying to sell voters on a new tax.
Conservative cabinet minister Diane Ablonczy insisted the party would be happy with the results, even though it fell about a dozen seats short of the 155 seats needed for a majority.
"We're very pleased with the very strong mandate we received tonight. I think you'll see a Parliament that works much better going forward," she told CBC News Tuesday night.
Harper, who must form a new cabinet in the coming weeks, is already facing opposition calls to return Parliament quickly to deal with the economic crisis and bring forward an economic update on the state of the country's financial books. Green Leader Elizabeth May, 54, fell short as well last night, losing to her Conservative rival Peter MacKay in the Nova Scotia riding of Central Nova.
The Greens failed to elect any of their candidates. Still, May's high-profile run gave new publicity to the party, thanks largely to her successful fight to win a spot in the televised leaders' debates, where she impressed many Canadians with her performance.
Harper launched the election on Sept. 7 determined to frame the ballot box issue as a question of whom Canadians should trust to lead the nation in troubled times.
In the end, the economy – and stomach-churning stock market tumbles that saw the Toronto index plunged more than 20 per cent during the campaign – stole his thunder and became the story of the campaign as all leaders pitched themselves as the best stewards to lead the nation.
The Prime Minister preached a "steady-as-she-goes" approach but Canadians scolded Harper for his initial lack of empathy for their worries over sagging investment portfolios and the future of their jobs. At one point, he even said there were some "great buying opportunities" as a result of the downtown, a comment that drew complaints that he was tone-deaf to the concerns of Canadians. The opposition parties jumped on the economy, charging that Harper's modest platform was a "do-nothing" recipe. Dion used the French-language televised debate to release his own five-point plan to bolster the economy. Layton drew attention to the loss of good-paying manufacturing jobs. As well, Conservative cuts to arts and culture funding – and Harper's dismissive response – cost the party precious seats in Quebec, where the Conservatives had carefully courted voters in the hopes of making gains.
The result now ensures that the threat of another election will continue to hang over the nation.
http://www.thestar.com/federalelection/article/517664
NRI wife paraded ..
JALANDHAR: In a shocking and brutal retribution for being "seen" with a man, a 30-year-old wife of an NRI was allegedly paraded naked in front of her children, mother-in-law and relatives as a bunch of angry villagers cheered on while some also recorded it on video.
The woman, in a complaint filed with police on Tuesday, said she had merely called a painter to her house as it was the festive season and she wanted a whitewash done. "But the sarpanch and some other villagers barged into my house and not only beat me up but also captured my image on their cellphones as they paraded me naked in front of my two children and relatives," the residentof Atta said.
Sarpanch Lakhbir Kumar is known to her and a few are even related to her. Dismissing her allegations, he said he played moral police and said a villagerhad seen her through "a cracked window" in a compromising position with the painter.
http://timesofindia.indiatimes.com/India/Jalandhar_NRI_wife_paraded_naked/articleshow/3596874.cms
The woman, in a complaint filed with police on Tuesday, said she had merely called a painter to her house as it was the festive season and she wanted a whitewash done. "But the sarpanch and some other villagers barged into my house and not only beat me up but also captured my image on their cellphones as they paraded me naked in front of my two children and relatives," the residentof Atta said.
Sarpanch Lakhbir Kumar is known to her and a few are even related to her. Dismissing her allegations, he said he played moral police and said a villagerhad seen her through "a cracked window" in a compromising position with the painter.
http://timesofindia.indiatimes.com/India/Jalandhar_NRI_wife_paraded_naked/articleshow/3596874.cms
Sunday, October 12, 2008
Rioters burn Muslim family of 6 to death in south India
APPublished: October 12, 2008, 14:03
Hyderabad: Rioters in southern India killed six members of a Muslim family by setting fire to their home after earlier clashes between Hindus and Muslims left four others dead and 15 injured in the same village, officials said on Sunday. Tensions have been high in Vatoli village since Friday when violence and looting erupted between the two sides, leading to four deaths, said Andhra Pradesh state Home Minister K. Jana Reddy. Authorities imposed a curfew on Friday, but were unable to stop the deadly arson attack, which apparently occurred before dawn on Sunday, Reddy said. "It is a beastly and barbaric act," Reddy told reporters. "Police are investigating the case and we will catch the culprits." Three children, including a 2-year-old, were among the six burnt to death, he said.
Vatoli is in Adilabad district, 275 kilometres north of the state capital of Hyderabad. Muslim leaders called for better protection for minorities, especially in rural areas. "Despite our repeated pleas and appeals, the government has failed to provide protection to the Muslims who live in remote areas and who have a very small population in those places," said Asaduddin Owaisi, a member of the lower house of the national Parliament
Hyderabad: Rioters in southern India killed six members of a Muslim family by setting fire to their home after earlier clashes between Hindus and Muslims left four others dead and 15 injured in the same village, officials said on Sunday. Tensions have been high in Vatoli village since Friday when violence and looting erupted between the two sides, leading to four deaths, said Andhra Pradesh state Home Minister K. Jana Reddy. Authorities imposed a curfew on Friday, but were unable to stop the deadly arson attack, which apparently occurred before dawn on Sunday, Reddy said. "It is a beastly and barbaric act," Reddy told reporters. "Police are investigating the case and we will catch the culprits." Three children, including a 2-year-old, were among the six burnt to death, he said.
Vatoli is in Adilabad district, 275 kilometres north of the state capital of Hyderabad. Muslim leaders called for better protection for minorities, especially in rural areas. "Despite our repeated pleas and appeals, the government has failed to provide protection to the Muslims who live in remote areas and who have a very small population in those places," said Asaduddin Owaisi, a member of the lower house of the national Parliament
Tuesday, October 7, 2008
Abu Dhabi buys Citigroup stake
NEW YORK (AP) -- The Abu Dhabi Investment Authority will invest $7.5 billion in Citigroup, offering the nation's largest bank needed capital to offset big losses from mortgages and other investments.
The MD of Abu Dhabi Investment Authority says Citigroup has "tremendous opportunities for growth".
The cash from the sovereign investment fund of the Gulf Arab state, which has benefited from this year's surge in oil prices, will be convertible into no more than 4.9 percent of Citigroup Inc.'s equity. Citigroup characterized the investment as passive and said the fund will not be able to name any board members to the bank.
The Investment Authority's purchase, announced late Monday, would make it one of Citi's largest shareholders.
"We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth," said the Investment Authority's managing director, Sheikh Ahmed Bin Zayed Al Nahayan. "This investment reflects our confidence in Citi's potential to build shareholder value."
The investment, which was expected to close within the next several days, will be considered Tier 1 capital for regulatory purposes, helping Citi reach its goal of returning to its target capital ratios in the first half of 2008, the bank said.
Citigroup's shares have lost about 45 percent of their value since the beginning of this year, wiping away $124 billion in market capitalization, as the drumbeat of bad news about its investment losses has mounted.
Citi shares jumped more than 2 percent, or $2.04, to $31.80 in premarket trading Tuesday. Shares fell $1, or 3.2 percent, to close at $30.70 Monday after hitting a five-year low earlier in the day.
Charles Prince stepped down as Citigroup's chairman and chief executive Nov. 4, the same day Citi announced that it will likely write down the value of its portfolio by $8 billion to $11 billion in the fourth quarter.
In the third quarter, the bank's exposure to assets tied to subprime mortgages led to a loss of about $6.5 billion.
The Investment Authority will receive equity units that pay an 11 percent annual yield until they are converted into Citigroup common shares at a price of up to $37.24 a share between March 15, 2010, and Sept. 15, 2011.
Analysts believe the Investment Authority is the world's largest sovereign wealth fund, although the fund has never publicly revealed its total assets. Analysts estimate the fund controls hundreds of billions of dollars, with some experts saying the amount could be approaching nearly a trillion dollars.
Sovereign funds throughout the Middle East have been building up overseas investments recently, much of it on the back of oil prices that have risen more than 60 percent this year, bringing record cash flow to the region. China and Russia also have considerable funds they are sending overseas.
Unlike its counterparts in Dubai, the Investment Authority provides very little information about its investments, with analysts saying it appears to regularly purchases less than 5 percent of the companies it targets to avoid having to disclose the investments.
Dubai International Capital, which is owned by the ruler of that booming Persian Gulf city-state, announced earlier Monday that it has acquired a stake of undisclosed size in the Japanese electronics and media company Sony Corp. Its other investments this year included acquiring a 3.12 percent of European Aeronautic Defence & Space Co., which builds Airbus commercial planes and military aircraft.
The firm also holds stakes in Daimler AG and British bank HSBC Holdings PLC.
Many companies have welcomed such investments because the funds tend to be stable investors, but some U.S. officials have expressed concern that their acquisitions could target sensitive industries with links to national security.
Abu Dhabi's move recalls the early 1990s investment in Citi made by Saudi Prince Alwaleed bin Talal. After the bank made some losing bets on U.S. real estate and Latin America, Alwaleed bought a stake for less than $600 million that has since ballooned into billions.
The Abu Dhabi investment comes at a time when Citi is trying to reassure investors amid heavy credit-related losses and a search for a new CEO.
"This investment, from one of the world's leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business," Win Bischoff, acting chief executive, said in a statement.
"This investment also enables us to access capital in an efficient manner, and is consistent with our strategy of maintaining a balance sheet that benefits from highly diverse sources of funding in terms of both geography and type of security," Bischoff said
LINK:
http://edition.cnn.com/2007/BUSINESS/11/27/citigroup.investment.ap/index.html
The MD of Abu Dhabi Investment Authority says Citigroup has "tremendous opportunities for growth".
The cash from the sovereign investment fund of the Gulf Arab state, which has benefited from this year's surge in oil prices, will be convertible into no more than 4.9 percent of Citigroup Inc.'s equity. Citigroup characterized the investment as passive and said the fund will not be able to name any board members to the bank.
The Investment Authority's purchase, announced late Monday, would make it one of Citi's largest shareholders.
"We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth," said the Investment Authority's managing director, Sheikh Ahmed Bin Zayed Al Nahayan. "This investment reflects our confidence in Citi's potential to build shareholder value."
The investment, which was expected to close within the next several days, will be considered Tier 1 capital for regulatory purposes, helping Citi reach its goal of returning to its target capital ratios in the first half of 2008, the bank said.
Citigroup's shares have lost about 45 percent of their value since the beginning of this year, wiping away $124 billion in market capitalization, as the drumbeat of bad news about its investment losses has mounted.
Citi shares jumped more than 2 percent, or $2.04, to $31.80 in premarket trading Tuesday. Shares fell $1, or 3.2 percent, to close at $30.70 Monday after hitting a five-year low earlier in the day.
Charles Prince stepped down as Citigroup's chairman and chief executive Nov. 4, the same day Citi announced that it will likely write down the value of its portfolio by $8 billion to $11 billion in the fourth quarter.
In the third quarter, the bank's exposure to assets tied to subprime mortgages led to a loss of about $6.5 billion.
The Investment Authority will receive equity units that pay an 11 percent annual yield until they are converted into Citigroup common shares at a price of up to $37.24 a share between March 15, 2010, and Sept. 15, 2011.
Analysts believe the Investment Authority is the world's largest sovereign wealth fund, although the fund has never publicly revealed its total assets. Analysts estimate the fund controls hundreds of billions of dollars, with some experts saying the amount could be approaching nearly a trillion dollars.
Sovereign funds throughout the Middle East have been building up overseas investments recently, much of it on the back of oil prices that have risen more than 60 percent this year, bringing record cash flow to the region. China and Russia also have considerable funds they are sending overseas.
Unlike its counterparts in Dubai, the Investment Authority provides very little information about its investments, with analysts saying it appears to regularly purchases less than 5 percent of the companies it targets to avoid having to disclose the investments.
Dubai International Capital, which is owned by the ruler of that booming Persian Gulf city-state, announced earlier Monday that it has acquired a stake of undisclosed size in the Japanese electronics and media company Sony Corp. Its other investments this year included acquiring a 3.12 percent of European Aeronautic Defence & Space Co., which builds Airbus commercial planes and military aircraft.
The firm also holds stakes in Daimler AG and British bank HSBC Holdings PLC.
Many companies have welcomed such investments because the funds tend to be stable investors, but some U.S. officials have expressed concern that their acquisitions could target sensitive industries with links to national security.
Abu Dhabi's move recalls the early 1990s investment in Citi made by Saudi Prince Alwaleed bin Talal. After the bank made some losing bets on U.S. real estate and Latin America, Alwaleed bought a stake for less than $600 million that has since ballooned into billions.
The Abu Dhabi investment comes at a time when Citi is trying to reassure investors amid heavy credit-related losses and a search for a new CEO.
"This investment, from one of the world's leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business," Win Bischoff, acting chief executive, said in a statement.
"This investment also enables us to access capital in an efficient manner, and is consistent with our strategy of maintaining a balance sheet that benefits from highly diverse sources of funding in terms of both geography and type of security," Bischoff said
LINK:
http://edition.cnn.com/2007/BUSINESS/11/27/citigroup.investment.ap/index.html
Monday, October 6, 2008
Delhi tops crime charts for fifth year in a row
1 Jan 2008, 0349 hrs IST, Vishwa Mohan,TNN
NEW DELHI: Delhi continues to be the undisputed 'crime capital' of the country. It is not only No 1 among 35 big cities with the largest number of crime cases but also has the dubious distinction of having topped the list for five years in a row. The National Crime Records Bureau (NCRB), in its latest annual report—Crime in India: 2006—also points out that Delhi, Mumbai and Bangalore together accounted for more than one-third of all crimes reported in Indian cities having a population of over a million people, for the second year in a row. The national capital occupies the top slot for almost all violent crimes, including murder, rape, dowry death, molestation, kidnapping and abduction. The report also notes the disturbing trend of young people taking to crime in a big way. It shows that 44.6% of the total arrested criminals during 2006 belonged to the 18-30 year age-group. In 2005, the figure was 44% and the trend was uniformly high across the 35 big cities under survey. Besides the top three cities, Ahmedabad, Hyderabad, Chennai, Jaipur, Indore and Pune are the other mega cities which figure prominently in NCRB’s list for reporting relatively higher number of cases. The 35 mega cities collectively reported a total of 3,26,363 cognizable crimes in 2006, an increase of 3.7% over 2005. According to NCRB, the country reported a total of 51,02,460 cognizable crimes, of which 18,78,293 related to murder, rape, attempt to murder, kidnapping, abduction, dowry death, dacoity, molestation and other violent offences. The remaining 32,24,167 incidents were cases registered under the Arms Act, Gambling Act, Prohibition Act, Forest Act, Railways Act and other special and local laws. Although the overall crime in the country recorded an increase of 1.5% in 2006 as compared to 2005, the ‘crime rate’ (number of crimes per one lakh population) declined by 0.02%. Predictably, Delhi bucked this trend as well and the crime rate here grew to 357.2, more than double the national average of 167.7. The crime rate is universally accepted as a more realistic indicator of crime. These figures reveal the dismal state of women in the capital. Dowry death (120), rape (533) and molestation (629) rates in Delhi were much higher as compared with other mega cities. Delhi, in fact, accounted for 31.2% of the total rape cases reported in big cities. Among the states, Madhya Pradesh reported the highest number of rapes (2,900), accounting for as much as 15% of the total. NCRB’s figures for Delhi endorsed what the Bureau of Police Research and Development (BPR&D) of the home ministry had recently mentioned about the city while referring to a study/survey. That study, conducted by the National Institute of Criminology and Forensic Science (NICFS) at the behest of BPR&D, had concluded that the "absence of visible police patrolling" and "the police's attitude towards women complainants" in the national capital had substantially reduced the trust-quotient of police, particularly among women. As far as states are concerned, NCRB has found that Madhya Pradesh recorded the highest number of crimes (1,94,711) followed by Maharashtra (1,91,788), Andhra Pradesh (1,73,909), Tamil Nadu (1,48,972) and Rajasthan (1,41,992) during 2006. Among violent crimes, India reported 32,481 murders, 19,348 rapes, 7,618 dowry deaths and 36,617 molestation cases in 2006.
LINK:
http://timesofindia.indiatimes.com/articleshow/2665983.cms
NEW DELHI: Delhi continues to be the undisputed 'crime capital' of the country. It is not only No 1 among 35 big cities with the largest number of crime cases but also has the dubious distinction of having topped the list for five years in a row. The National Crime Records Bureau (NCRB), in its latest annual report—Crime in India: 2006—also points out that Delhi, Mumbai and Bangalore together accounted for more than one-third of all crimes reported in Indian cities having a population of over a million people, for the second year in a row. The national capital occupies the top slot for almost all violent crimes, including murder, rape, dowry death, molestation, kidnapping and abduction. The report also notes the disturbing trend of young people taking to crime in a big way. It shows that 44.6% of the total arrested criminals during 2006 belonged to the 18-30 year age-group. In 2005, the figure was 44% and the trend was uniformly high across the 35 big cities under survey. Besides the top three cities, Ahmedabad, Hyderabad, Chennai, Jaipur, Indore and Pune are the other mega cities which figure prominently in NCRB’s list for reporting relatively higher number of cases. The 35 mega cities collectively reported a total of 3,26,363 cognizable crimes in 2006, an increase of 3.7% over 2005. According to NCRB, the country reported a total of 51,02,460 cognizable crimes, of which 18,78,293 related to murder, rape, attempt to murder, kidnapping, abduction, dowry death, dacoity, molestation and other violent offences. The remaining 32,24,167 incidents were cases registered under the Arms Act, Gambling Act, Prohibition Act, Forest Act, Railways Act and other special and local laws. Although the overall crime in the country recorded an increase of 1.5% in 2006 as compared to 2005, the ‘crime rate’ (number of crimes per one lakh population) declined by 0.02%. Predictably, Delhi bucked this trend as well and the crime rate here grew to 357.2, more than double the national average of 167.7. The crime rate is universally accepted as a more realistic indicator of crime. These figures reveal the dismal state of women in the capital. Dowry death (120), rape (533) and molestation (629) rates in Delhi were much higher as compared with other mega cities. Delhi, in fact, accounted for 31.2% of the total rape cases reported in big cities. Among the states, Madhya Pradesh reported the highest number of rapes (2,900), accounting for as much as 15% of the total. NCRB’s figures for Delhi endorsed what the Bureau of Police Research and Development (BPR&D) of the home ministry had recently mentioned about the city while referring to a study/survey. That study, conducted by the National Institute of Criminology and Forensic Science (NICFS) at the behest of BPR&D, had concluded that the "absence of visible police patrolling" and "the police's attitude towards women complainants" in the national capital had substantially reduced the trust-quotient of police, particularly among women. As far as states are concerned, NCRB has found that Madhya Pradesh recorded the highest number of crimes (1,94,711) followed by Maharashtra (1,91,788), Andhra Pradesh (1,73,909), Tamil Nadu (1,48,972) and Rajasthan (1,41,992) during 2006. Among violent crimes, India reported 32,481 murders, 19,348 rapes, 7,618 dowry deaths and 36,617 molestation cases in 2006.
LINK:
http://timesofindia.indiatimes.com/articleshow/2665983.cms
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