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| January 07, 2009 | Wednesday | Muharram 09, 1430 |
Updated round-the-clock, with major updates after 10:00 PST (05:00 GMT)
India’s Satyam chief quits, shares plunge BANGALORE: The chairman of Satyam Computer Services, India’s fourth-biggest software services exporter, announced his resignation on Wednesday, triggering a 73.1 per cent drop in the company’s share price, and dragging the main share index down by 7.36 per cent. The shocking revelation comes after India’s fourth-largest outsourcer’s botched attempt last month to buy two construction firms in which the company’s founders held stakes and key customer World Bank dropping its ties with the outsourcing company. (Posted 13:29 PST)
Women take lead in new Bangladesh cabinet DHAKA: Bangladesh's newly sworn-in prime minister Sheikh Hasina Wajed has unveiled her cabinet team, appointing women for the first time to head the home and foreign ministries. The 31-member cabinet comprises five women in total, including the 61-year-old prime minister herself, who is taking power of the impoverished country for the second time. (Posted 11:58 PST)
Taliban kill three policemen in Hungu PESHAWAR: Three policemen were killed and two injured when Taliban militants stormed their checkpoint in the Dalman area of Hungu district, police said Wednesday. An unknown number of armed men staged the attack late Tuesday, killing the three police officials, local police chief Sajjad Khan told AFP. (Posted 11:32 PST)
Zawahiri urges Muslims to attack Israel, West WASHINGTON: Al-Qaeda number two Ayman al-Zawahiri called on Muslims to attack Israeli and Western targets in response to the Israeli assault on the Gaza Strip in a message released online Tuesday. ‘O Muslims everywhere: fight the Zionist crusader campaign. Strike its interests everywhere you can reach them,’ Zawahiri said in an audio statement made available by SITE Intelligence Group, a US-based monitoring company. (Posted 04:48 PST)
Venezuela expels Israeli ambassador over Gaza CARACAS, Venezuela: Venezuela ordered the expulsion of the Israeli ambassador and some embassy staff on Tuesday to protest Israel's military offensive in the Gaza Strip. The decision by President Hugo Chavez, a longtime critic of US and Israeli policy, to kick out the diplomats appeared to be the strongest reaction yet to the Gaza offensive by any country with ties to Israel.(Posted 03:54 PST)
Gilani orders immediate release of agriculture funds ISLAMABAD: Prime Minister Gilani on Tuesday directed the Ministry of Finance to release funds already approved for the Agriculture Ministry to ensure that on-going projects were not stalled. Chairing a meeting to review the goals and targets of the Ministry of Food and Agriculture, he directed the Ministry to undertake immediate measures to increase the storage capacity by involving and encouraging the private sector. (Posted 02:54 PST)
Pakistan emphatically rejects Indian accusations ISLAMABAD: Islamabad on Tuesday ‘emphatically’ rejected an allegation by Indian Prime Minister Manmohan Singh that Pakistan was involved in sponsoring terrorism in India. Sources in the President House said Pakistan’s strongly retaliated in a meeting between President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani that took place shortly after the statement of the Indian premier. (Posted 02:18 PST)
Baffled by huge sums By Max Hastings
MY wife asked last week: “Is £35bn a lot of money?” This was not intended to be a facetious question, and was certainly not a foolish one. It was prompted by news that £35bn is the latest unofficial estimate for the cost of the Beijing Olympics and its associated infrastructure projects.
Last summer, international opinion held that China’s spend on its prestige games was grotesquely large. It was alleged such a huge sum could only be squandered by a newly rich dictatorship unaccountable to an electorate. In September 2007, the British government’s bail-out of the Northern Rock bank was said to have reached “an eye-watering £7.75bn”. A few months ago, we were told that the UK Ministry of Defence faced a financial crisis because there is a £2bn “black hole” in its annual budget.
Yet in the past four months, the financial meltdown has yielded a flood of global figures that make all the above sums sound small change. The British government has injected £37bn into part-nationalisation of the banking system, and is said to be exposed to £150bn of potential mortgage liabilities. In 1967, the then UK government provoked a political crisis by devaluing the pound 14 per cent, yet in 2008 the currency fell by almost 25 per cent.
The US administration has pumped vast sums into its banks and mortgage institutions, and Barack Obama plans infrastructure spending and an economic fiscal stimulus that will cost close to a trillion dollars. A $17bn bail-out is projected for US motor manufacturers. Last year, £30 trillion was wiped off the value of the world’s stock markets. Statistics of this kind pour forth daily from governments and institutions. The point of my wife’s question, which I was unable to answer, is that in the face of such tidings most of us have succumbed to number blindness. Beyond grasping we are in a mess, we lack the slightest idea of the significance of the sums of money being pledged, lent, spent or squandered in our name. In the short term, such ignorance helps incumbent political parties. Electorates are grateful for any government action that promises to stave off immediate pain, job losses, bankruptcies, factory closures. A few months ago it was deemed a scandal that the UK’s ruling Labour administration was committed to spend £9.3bn of taxpayers’ money on the 2012 London Olympics. Now, so far have parameters changed, so drunk on figures have we become, that this sum sounds paltry.
Ministers are widely expected to throw up to £1bn at Jaguar Land Rover, notionally because it is “too big to fail”, but more credibly to protect 15,000 jobs in marginal constituencies. Almost every independent industrial and financial commentator condemns such a subsidy to the manufacture of gas guzzlers. But it would be rash to assume that it will be bad politics. Nobody seems to take a billion pounds seriously any more.
How do we sustain a hold on reality about the meaning of money, and the relative significance of the sums being expended to assuage the financial crisis? I have tried to help myself to do so, by looking up some government spending figures for 2009. The nation’s gross domestic product is projected to be £1,473bn. The central government’s budgeted expenditure is £455bn, that of local authorities a further £166bn. Central government will spend £110bn on healthcare, £52bn on welfare, £28bn on education, £37bn on defence, £10bn on transport.
All these commitments have been made before the government embarks on further bank and industrial rescues, infrastructure projects and new unemployment relief programmes. Even on the basis of the November pre-budget report numbers, government borrowing next year will reach £118bn.
I can grasp that the collapse of Bernard Madoff’s hedge fund, to which UK banks are substantially exposed, has written off a sum almost as great as Britain’s annual defence budget. I understand that central banks have little choice save to keep printing money, to start credit moving again and stave off a depression. Thereafter I have little or no understanding of the implications of this huge government borrowing, beyond the fact that at some time there will be a ticket-collector at the head of the escalator.
Much has been written in recent weeks about Franklin Roosevelt’s New Deal, the storm of activity with which, following his inauguration in March 1933, he sought to resurrect the US economy from the Great Depression. Among his less-noticed measures was a cut in public sector pay.
Today, is it credible that hundreds of millions of employees in the world’s manufacturing, service and financial services industries should suffer, as they are going to, while public sector pay and benefits remain inviolate? Will our crippled economy be able to fund the huge public pension liability — and even private sector final salary commitments?
I have no idea of the answers to any of these questions, but lots of people are asking them. Many crises that afflict the world — Zimbabwe, Congo, Iraq, Afghanistan, Gaza, even climate change — invite ready expressions of opinion, however footling, from every bar customer. What seems most striking about the credit crunch is that it reduces most people to silence, because they find its implications and possible solutions beyond their comprehension.
It is rendered especially baffling because, metaphorically speaking, no bombs are falling. Shoppers still pack suburban malls, cars crowd motorways, passengers throng airports, the lights stay on. Thus far, for all except some hundreds of thousands who have already lost their jobs, only statistics reveal the bad news. The implications have yet to work through into real life.
There seems an overwhelming public mood of fatalism. Anger must follow, sooner or later, and even perhaps social unrest. But this will come only when the consequences literally reach home. Meanwhile, number blindness has overtaken most of us. We are obliged to hope, with only limited conviction, that this does not extend to the office of the UK prime minister in Downing Street, London, and the Obama White House.
— The Guardian, London
Founder: Quaid-i-Azam Mohammad Ali Jinnah
Editor: Abbas Nasir
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