News Wrap


Tax breaks and concessions to business in India are estimated as foregone revenue, and is of the same order as all subsidies to the poor majority. Corporate led economic growth has the government offering land and natural resources at virtually throwaway prices to private corporations. The development-induced displacement of population is about 0.6 million people per year, and never touches privileged citizens. The displaced are generally the poor ‘‘Adivasis’’, the original inhabitants of the country, and the least privileged on the caste hierarchy, the Dalits in the countryside. The Adivasis constitute about 8% of the population, but account for 40% to 50% of the displaced. Employment and livelihood possibilities have been halved in the corporate sector, along with a doubling of output. Increasing unemployment accompanies corporate-led jobless growth. Private sector manufacturing and services activities surged to a 37-month high in March 2016 on new business orders. Despite solid upturns in new business and output, the labour market in India, has remained broadly stagnant for the past two years.

Bihar’s Liquor Ban
The Bihar state government on 05 April 2016, declared Bihar a dry state, by imposing a total ban on the sale and consumption of alcohol. The state government had banned sale and consumption of country and spiced liquor in rural areas, from 01 April 2016. Now sale of Indian made foreign liquor (IMFL) is banned in towns and cities of Bihar. After a total ban on alcohol was clamped in Bihar, huge quantities of liquor, country made as well as IMFL have been seized during raids across Bihar. The total ban on alcohol sale and consumption, announced by Bihar’s chief minister Nitish Kumar, has resulted in drastic decline in footfalls at hotels, clubs, bars and restaurants in different parts of the state. Patna and other towns witnessed an overwhelming response of people, particularly women and children, against liquor. The Bihar state exchequer is estimated to suffer a revenue loss of around Rs 4000 crore per financial year, due to the liquor ban. As a political gambit, in Tamil Nadu proposed prohibition was a campaign plank of the AIADMK party, led by Jayalalitha, for the state assembly elections. After taking oath on May 23, Jayalalitha ordered closure of 500 liquor shops.

Global energy emissions
Even though the global economy kept growing, the energy related carbon emissions stayed flat for the second consecutive year in 2015. A surge in renewable power around the world was the main reason pollution levels stalled. Clean power investment is rising, and in 2015 reached a record $328.9 billion globally. More than 90% of new electricity generated in 2015 came from renewable, the highest level since 1974. Half the growth came from wind farms alone. Emissions fell noticeably in 2015, in both USA and China, the biggest carbon polluter for the past decade, even as both economies grew. The goals of the international climate change accord of December 2015 (Paris) aims to stop global temperatures rising more than 2°C, from pre-industrial times. The world has already warmed by nearly 1°C. Year 2015 was by far the hottest year, since modern records began in the 1800s. Coal continues to dominate global electricity supplies, accounting for a 39% share of generation in 2015, compared with less than 24% of renewables, mostly hydropower. Emissions fell by 2% in USA, as low natural gas prices continued to drive a switch away from coal power.

Alongwith more than 170 nations, India signed the historic Paris climate agreement, on 22 April 2016, at UNHQ, for cutting down greenhouse gas omissions, to combat global warming. No country has shared a detailed strategy for ending the era of fossil-fuel emissions and converting entirely to clean energy.

Migrant crisis and Turkey
Turkey will receive billions of Euros from the European Union, in return for taking back migrants who leave its shores. Under the plan pushed by Angela Merkel, the German Chancellor, the asylum application of Syrians, Iraqis and others will be processed not in Greece, but in Turkey. The biggest prize will be visa-free access for 75 million Turks to the EU’s Schengen area, and an acceleration of Turkey’s application for EU membership. A visa-free access and accelerated EU membership are not guaranteed. The migrant crisis that has forced the EU to turn to Turkey, has its roots in the Syrian conflict. Europe’s leaders must share the blame. EU is striking deals with Turkey, that has scant respect for human rights and press freedom. The arrangements involving the blanket return of anyone from one country to another, is without any refugee protection safeguards under international law or European laws. Turkey is home to nearly 3 million Syrian refugees, the largest number worldwide. Its acceptance rate for refugees from Afghanistan and Iraq was ‘‘very low’’, about 3%. Europe has not even fulfilled its agreement of September 2015, to relocate 66,000 refugees from Greece, redistributing only 600 to date, within the bloc.

Working Saudis
A generation of Saudis are beginning to fill jobs once performed by foreigners, as plunging oil prices take their toll on Saudi Arabia. The world’s largest oil exporter Saudi Arabia has witnessed a 18-month slide in oil prices from $90 a barrel to about $35. Nearly 7 million of Saudi Arabia’s 28 million population, about half the workforce, is made up of foreigners employed by private businesses. The Saudi labour ministry has announced a ‘‘guided localization’’. As part of this programme, mobile phone shops are employing locals. Many Saudis are less enthusiastic about being pushed into jobs they consider beneath them. Saudis are under pressure to join the private sector. The budget deficit is expected to exceed 20% of GDP in 2016. The Saudi government is looking for savings, by cutting its $80 billion (£55.6 billion) payroll. Large scale public sector employment is a central part of the social contract in Saudi Arabia. It has become unaffordable with the collapse of oil prices, and biting austerity. Half the population of Saudi Arabia is under 25. Job creation struggles to keep pace with new entrants into the labour force. Lebanon and Egypt depend heavily on expatriate remittances from the Gulf states.

Vol. 48, No. 48, Jun 5 - 11, 2016