Sunday, May 19, 2013

Five Stories Of The Week: Ending May 18, 2013


News & Commentary



Here are five stories that shaped my world this week:

Election Results In Pakistan: An article, in BBC News says now that Nawaz Sharif and his party, Pakistan Muslim League (PML-N), have won the general elections, he faces a number of challenges, not the least of which are economic and energy matters.

The BBC article says:
Financial daily Business Recorder says the elections have given the country "a rare chance to reconstruct the country "which has to be harnessed and fully exploited to regain our due place in the comity of nations".As Mr Sharif comes from a business family, the paper argues this should help him "winning back the confidence and trust of the foreign investors".
Daily Times too feels that the "economy, particularly energy, needs immediate attention" and notes that "terrorism will remain a great impediment in persuading capital, domestic and foreign, to invest in the country".Pakistan has faced severe power shortages affecting its ability to bolster the economy. The Nation warns that "the monster of load-shedding (power cuts), and its concomitant evils, lies in wait for the PML-N government".
Writing in the Dawn newspaper, columnist Murtaza Haider says "the faltering economy, a near complete breakdown of the infrastructure characterised by power outages and fuel shortages, unemployment, terrorist violence… are some of the challenges that have to be confronted by the new government".Mr Sharif has promised to make a series of changes in governance to tackle these key issues. But some pundits are urging a cautious approach. "Thus, promising jobs for everyone in months, ending corruption in 90 days, and a quick end to load-shedding are the kind of promises that no government will be able to fulfil in a jiffy," Mr Haider adds.
Leading columnist Tariq Rahman also highlights power shortages and the economy as challenges for the new government in his Express Tribune article, but adds that it will have to take an inclusive approach in dealing with them.
This is not the first time Prime Minister Sharif has been in power; let’s hope that he has learned from past encounters with power and will now take a more inclusive approach, one that will benefit all peoples of Pakistan.

Making Bibi’s Bed in Israel: It is often the case that when political leaders stay in power too long, they become so arrogant that they lose sight of who placed them in power in the first place. Such is the case with Prime Minister Benjamin Netanyahu of Israel, who decided to install a double bed on a flight, costing Israeli taxpayers $127,000 at a time when regular Israelis face austerity measures.

In an article in The Guardian, Harriet Sherwood writes:
The revelation comes amid growing resentment over an austerity budget proposed by the finance minister Yair Lapid, a former TV personality who won popular support in January's election by promising to champion Israel's financially squeezed middle class. Up to 15,000 people demonstrated in Tel Aviv, Jerusalem and other cities on Saturday night in an echo of the massive social justice protests that swept the country two years ago.
Following an outcry over the cost of installing a "rest chamber" on the chartered El Al flight, Netanyahu's office said that henceforth no sleeping cabins would be provided on short-haul flights to Europe. Initially, officials defended the move – disclosed by Israel's Channel 10 on Friday evening – in a statement that was immediately mocked by commentators for its detailed account of Netanyahu's schedule.
The statement said: "The prime minister took off for London on the night after Independence Day, in the course of which he attended a reception for outstanding soldiers at the presidential residence, the World Bible Quiz, a reception for diplomatic personnel in Israel and the Israel prize ceremony. The flight was booked for midnight after a day full of events, and afterwards the prime minister was to represent the state of Israel at a number of official international events, including meetings with the prime ministers of Canada and Britain. It is acceptable for the prime minister of Israel to be able to rest at night between two packed days as those."
El Al, Israel's national airline, was paid $427,000 for the charter flight, including the cost of the chamber. A smaller plane, without sleeping quarters, would have cost $300,000, according to Israeli media reports. Channel 10 pointed out that the Israeli president, Shimon Peres, who will be 90 next month, spent an 11-hour flight to South Korea seated in business class.
Writing in Yedioth Ahronoth, Israel's biggest-selling newspaper, Sima Kadmon said: "We thought that nothing could surprise us anymore when it came to the Netanyahus' personal behaviour. Well, we thought wrong. It turns out that King Bibi and Queen Sara are entitled to do everything … The double bed that was installed on the plane cost the Israeli public, which is buckling under the weight of the austerity measures, half a million shekels. Is there no shame?
No, not on the part of this “royal couple,” who have shown a great sense of entitlement. That they both lack empathy is quite apparent.  That they care only about the trappings of power is also apparent. It's unfortunate that Israel, a nation founded on socialist principles, has veered so far right, that it is now being led by a radical and arrogant man. The day that he steps down cannot come too soon for the state of Israel, which deserves a more rational and thoughtful leader.

Better Conditions In Bangladesh: An article, by Olga Khazan, in The Atlantic says that better working conditions in Bangladesh would cost consumers a nominal increase in clothing prices.

Khazan writes:
The dangerous conditions have been partly blamed on price-conscious businesses, some of whom go with the cheapest and often least-safe local suppliers at the expense of protections for workers. After a November fire that killed 112 workers, brands like Wal-Mart, Gap, and H&M refused to sign a new union-proposed safety plan, which would have introduced more rigorous safety inspections, saying it was “not financially feasible.”
That price pressure comes from consumers, too, though. In a story that's so darkly uncomfortable it reads like it's from The Onion—but is in fact from Bloomberg—a young British shopper explains how she loves her bargains even though she’s troubled by the plight of workers in developing countries: “It bothers me, but a lot of retailers are getting their clothes from these places and I can't see how I can change anything,” 21-year-old university student Elizabeth McNail said, clutching a brown paper bag from clothier Primark the day after a building collapse in Savar, Bangladesh, killed at least 381 people. “They definitely need to improve, but I'll still shop here. It's so cheap.”
This consumer cognitive dissonance raises the question: just how much more expensive would our clothes get if factories in Bangladesh were safer? There aren't many clear-cut studies on the matter because it would depend on how much the retailers passed on the price increases to customers, as opposed to taking a hit to profit margins. Scott Nova at the Worker's Rights Consortium, a Washington, D.C.-based advocacy group, made this calculation:
We have a general cost estimate for the renovations, upgrades and retrofitting of buildings that is needed across the industry in Bangladesh to make the factories safe. The figure is $3 billion. That translates to about 8 cents per garment at factory price. 
That $3 billion, Nova says, would go toward properly constructed fire exits and fire escapes, emergency lighting, proper alarm systems, electrical rewiring, closure of structurally unsound buildings, and the relocation of factories to safe structures. The impact to retailers' profits, he argues, would be minimal:
For a major retailer, with 5 percent of its production in Bangladesh, which is typical, the increased cost would be about four one-thousandths of a percent of total corporate revenue.A tiny fraction of one percent isn't much, but that's not the end of a t-shirt or tennis shoe's life-cycle:
It’s both wrong and a cynical ploy on the part of major retailers to blame the consumers. It’s up the corporations to change things; after all, they have the money and the power to do so, if they were so inclined. That major retailers say it’s not financially feasible” is an obvious lie when they rack up billions in profits; there is no other way of putting it when they bend the truth to suit their avarice. It raises the question on whether the major retailers really care about working conditions in such nations as Bangladesh. So far their silence on the matter tells us otherwise.

Breach Of Constitution In U.S.: An article in CNN and widely reported says that the American Department of Justice, as CNN says, “secretly collected two months of telephone records for reporters and editors at The Associated Press,” the news agency reported.

The CNN article, by Matt Smith and Joe Johns, says:
The records included calls from several AP bureaus and the personal phone lines of several staffers, AP President Gary Pruitt wrote. Pruitt called the subpoenas a "massive and unprecedented intrusion" into its reporting.
"These records potentially reveal communications with confidential sources across all of the newsgathering activities undertaken by the AP during a two-month period, provide a road map to AP's newsgathering operations and disclose information about AP's activities and operations that the government has no conceivable right to know," wrote Pruitt, the news agency's CEO.
The AP reported that the government has not said why it wanted the records. But it noted that U.S. officials have said they were probing how details of a foiled bomb plot that targeted a U.S.-bound aircraft leaked in May 2012. The news agency said records from five reporters and an editor who worked on a story about the plot were among those collected
The subpoenas were disclosed to the news agency on Friday, Pruitt wrote. In all, federal agents collected records from more than 20 lines, including personal phones and AP phone numbers in New York; Hartford, Connecticut; and Washington, he wrote.
"We regard this action by the Department of Justice as a serious interference with AP's constitutional rights to gather and report the news," he told Holder. Pruitt demanded that the department return all records collected and destroy all copies.
The U.S. attorney's office in Washington responded that federal investigators seek phone records from news outlets only after making "every reasonable effort to obtain information through alternative means." It did not disclose the subject of the probe.
"We must notify the media organization in advance unless doing so would pose a substantial threat to the integrity of the investigation," it said. "Because we value the freedom of the press, we are always careful and deliberative in seeking to strike the right balance between the public interest in the free flow of information and the public interest in the fair and effective administration of our criminal laws."
This is shameful and a weak defense of an action that explicitly goes against the U.S. Constitution. In addition, something rings false about the statement from the Justice Department in defense of an intrusive action; after all they are infringing on an important constitutional right, namely, freedom of the press. I expect many lawsuits will be forthcoming soon against the Department of Justice.

Economic Revival In Japan: After two decades of stagnation in Japan, Prime Minister Shinzo Abe has revitalized the economy; so say an article in this week’s Economist:
WHEN Shinzo Abe resigned after just a year as prime minister, in September 2007, he was derided by voters, broken by chronic illness, and dogged by the ineptitude that has been the bane of so many recent Japanese leaders. Today, not yet five months into his second term, Mr Abe seems to be a new man. He has put Japan on a regime of “Abenomics”, a mix of reflation, government spending and a growth strategy designed to jolt the economy out of the suspended animation that has gripped it for more than two decades. He has supercharged Japan’s once-fearsome bureaucracy to make government vigorous again. And, with his own health revived, he has sketched out a programme of geopolitical rebranding and constitutional change that is meant to return Japan to what Mr Abe thinks is its rightful place as a world power.
Mr Abe is electrifying a nation that had lost faith in its political class. Since he was elected, the stockmarket has risen by 55%. Consumer spending pushed up growth in the first quarter to an annualised 3.5%. Mr Abe has an approval rating of over 70% (compared with around 30% at the end of his first term). His Liberal Democratic Party is poised to triumph in elections for the upper house of the Diet in July. With a majority in both chambers he should be able to pass legislation freely.
Pulling Japan out of its slump is a huge task. After two lost decades, the country’s nominal GDP is the same as in 1991, while the Nikkei, even after the recent surge, is at barely a third of its peak. Japan’s shrinking workforce is burdened by the cost of a growing number of the elderly. Its society has turned inwards and its companies have lost their innovative edge.
Mr Abe is not the first politician to promise to revitalise his country—the land of the rising sun has seen more than its share of false dawns—and the new-model Abe still has everything to prove. Yet if his plans are even half successful, he will surely be counted as a great prime minister.
That he will, because the people of Japan have been waiting a long time to see some improvement in their way of life. China’s success has in many ways been Japan's demise as a leading economic power; China displaced Japan’s long-standing position as the world’s second largest economy, after the United States. It will interesting to see how well Japan fares in the next year or two under “Abenomics.”