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Greece crisis may kill Euro: Why we should prepare for Euroexit

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By Vatsal Srivastava

A great economic experiment began in 1951 with the formation of the European Coal and Steel Community. It was an attempt to make war within Europe impossible by establishing free trade in coal and steel, eliminating all tariffs and restrictions on cross border economic shipments.

Ideally, it would ensure that French steel mills relied on German coal and vice versa so that any future differences between the two nations would be extremely destructive economically thereby reducing the possibility of war.

In 1957, the European Economic Community was formed as a customs union with free trade among its six founding members – Belgium, France, Italy, Netherlands, Luxembourg and West Germany. By the mid 1980s, Britain, Ireland, Denmark, Spain, Portugal and Greece had joined this group. Free trade from closer integration undoubtedly led to economic gains not witnessed for many decades. But this was more about political integration and European unity.

The idea that a previously war torn continent can be economically integrated and be a beacon of democracy was impossible to ignore. European political leaders were so enthralled by the idea of a “strong and united Europe” that all warnings of future asymmetric shocks and the problems addressing them within a single currency union were ignored.

euu

When the idea of a common currency was floated, it was politically impossible to reject. Principles of Economics 101 were abandoned and the Euro was introduced in 1999. This was of course an economic policy blunder.

Consider what happened after the global housing bubble collapsed starting with the US and eventually led to housing busts in southern Europe. The housing boom in Spain was financed by huge inflows of capital from “core Europe” — most notably Germany. This boom which eventually turned out to be a great bubble led to inflation and thus wage increases in Spain.

Wages rose about 30 percent in Spain compared to only 9 percent in Germany. After the bubble collapsed, Spain needed to turn its economy away from construction towards services and manufacturing. But at this point, Spain had lost its competitive advantage due to the wide wage differential with Germany and other neighbours.

Enter the problem of a common currency! With the Euro the only way Spain could restore competitive advantage was by cutting wages. But it is almost always impossible to negotiate lower wages and workers will always refuse wage cuts and a lower standard of living. But if Spain had its own currency, this problem would have been solved overnight.

greek-euro_1922940b

The Spanish central bank could have simply intervened in the foreign exchange markets and devalued its currency versus its competitors in order to regain competitiveness. The same logic can be extended to explain the problems faced by Portugal, Italy, Greece and the other “non-core” European nations.

The Euro also fails to meet one of the key requisites of an “optimum currency area” – that of labour mobility. Labour does not move freely within the Eurozone. Even though Europeans can legally take up work anywhere in the European Union, linguistic and cultural divides are are large enough to put a cap on migration.

How else would one explain 50 percent youth unemployment in Greece, mass unemployment in Spain and Portugal and historically low levels of unemployment in Germany? Such stark contrasts are proof that the disadvantages of a common currency far outweigh the benefits that have come Europe’s way by adopting the Euro.

Right now it’s Greece’s problem. But as we saw at the peak of the debt crisis (2010-11), it doesn’t take time for much larger economies such as Spain, Portugal and Italy to be considered close to junk status. The markets have remained calm during this “crisis” as they believe the ECB can limit the contagion from spreading to other peripheral nations.

But in the long run, the debate won’t be about the prowess (or the lack) of the IMF’s economic forecasting models, or the austerity versus fiscal stimulus, of for that matter the ability of the ECB to do “whatever it takes” or whether the bigger threat to the Eurozone is inflation or deflation.

European policymakers will soon need to answer the more fundamental question which is at the heart of Europe’s problems: How long can the Euro survive? “If the Euro fails, Europe will fail”, said Angela Merkel in Berlin on Monday. A Grexit, or a Greek withdrawal, can be easily absorbed by the financial system. The great crisis we should prepare for is the likelihood of a “Euroexit”. (IANS)

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69 Years a Slave? Balochistan’s Struggle for Freedom : A Detailed Report

Baloch nationalists assert that theirs is a freedom struggle; they were occupied by Pakistan in 1948 and have been fighting since to free themselves.

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Balochistan
Baloch people address their protests as a freedom struggle to liberate and unify their people and land from control of Pakistan, Iran and Afghanistan. Wikimedia
  • Even after 70 years of Pakistan’s creation, Balochistan refuses to associate itself as a part of the country
  • Pakistan’s military occupation of Balochistan began in 1948 before which the province had existed as an independent state
  • The insurgency in Balochistan traces its roots in ethnic nationalism along with feelings of political and economic exclusion

Balochistan, August 31, 2017 : Located in the South West of Pakistan, the Balochistan province of Pakistan constitutes nearly 45 per cent of the country’s territory. However, even after 70 years of Pakistan’s creation, the people of the province refuse to associate themselves with Pakistan or its framework of a nation state. They believe they have been Balochis for over three thousand years, who have now been invaded.

“It is freedom struggle,” believes activist Naela Quadri Baloch like many other Baloch nationalists. According to her, Balochistan had been occupied by Pakistan in 1948 and “ever since we have been fighting against Pakistan to free ourselves”, she believes.

In 2016 during an interview with The Times of India, the women’s leader and activist Naela Quadri Baloch had asserted that Pakistan is not interested in Kashmiris but specifically in the territory of Jammu and Kashmir for its desire to control the Indus river system. Similarly, it is also not interested in the Balochis, but the land of the state for its strategic location and mineral reserves.

Baloch nationalists assert that Pakistan’s economy is dependent on loans from the IMF, World Bank and the Western countries that are allegedly taken on the pretext of Balochistan’s rich mineral resources. They further claim that Pakistan’s strategic importance is also due to Balochistan coast. Pakistan would not be able to survive, which is why it does not want Balochistan to emerge as an independent state.

Balochistan
Balochistan comprises of about 45 per cent of Pakistan’s territory. Wikimedia

While the world views it as an insurgency movement, Balochis address their protests as a freedom struggle to liberate and unify their people and land from control of Pakistan, Iran and Afghanistan.

They maintain that Balochistan was never a part of India or Pakistan and it had always been an independent country.

Balochistan At The Time Of Partition

Balochistan comprises of four erstwhile princely states – Kalat, Kharan, Lasbela and Makran, that had been unified by Naseer Khan, the Khan of Kalat.

During the British rule, the province was divided into British Balochistan (25 per cent) and Native Balochistan, occupying 75 per cent of the total territory with people pledging adherence to Naseer Khan.

Immediately following partition and the creation of Pakistan, Khan’s descendant, Mir Ahmed Yaar Khan was faced with three options – independence, or accession to either India or Pakistan. He decided upon independence, following which a communiqué was released on August 11, 1947 giving independent sovereign status to Kalat.

However, by October 1947, Mohammad Ali Jinnah mooted Kalat to formally join the state of Pakistan. The Khan of Kalat did not agree to the accession which was followed by a standstill between the two leaders upon the status of present-day Balochistan.

Becoming A Part Of Pakistan

By April 1948, the Pakistan army moved into the province and captured Kalat. The Khans’ attempts of an armed campaign against the Pakistan army went futile and the province was merged with Pakistan by June 1948.

At the center of Balochistan’s forced accession was Mohammad Ali Jinnah, who had previously been hired by the Khans for his legal services to negotiate Kalat’s independent status with the Britishers.

Before partition, Jinnah had successfully mooted an ‘Independent Status’ of Kalat for which he was graciously awarded with gold. But, Balochistan breathed as a free country only from August 1947 to March 1948, after which Jinnah breached trust and betrayed the Khan, forcing the Pakistani invasion and eventual accession of Kalat.

ALSO READ Violence surges yet again in Balochistan

Surprisingly, during the struggle and annexation of present-day Balochistan, the Indian Congressmen, Mahatma Gandhi or the then-Governor General Lord Mountbatten made no attempts to hinder in the remonstration. This indifference can be attributed to the Indian leaders’ failure to realize the strategic implication of a sovereign Balochistan at the time.

A Growing Ethnic Nationalism

Following the formation of Pakistan, distorted power relations existed among different Muslim ethnicities. Additionally, unchallenged power was exercised by Punjabis who comprised of about 56 per cent population of the state.

In 1954, the One Unit scheme was launched by the federal government of Pakistan to merge the four existing provinces of West Pakistan (Khyber-Pakhtunkawa, Sindh, Balochistan and Punjab) to form a homogeneous, united political entity in an attempt to,

  • Forge national unity on basis of Islam and geography
  • Reduce gross expenditure
  • Help eliminate ethnic prejudices.

The move triggered violence throughout the country and especially in Balochistan, wherein this was interpreted as a strategy to establish Punjabi domination.

Balochistan rose against the move, which came to an end in 1970 with the overthrow of the One Unit scheme.

However, following the rebellion, a strong sense of nationalism, propounding larger political autonomy and a separate state for Balochistan broke a full-fledged insurgency from 1973 to 1977; over 80,000 personnel were deployed to quell the rebellion.    

Armed struggle to achieve separation from Pakistan lasted throughout the 1970s, in which 3,300 army personnel and 5,300 Balochis were killed. However, the Pakistani government successfully compressed the movement.

Economic Alienation

Baloch nationalists have repeatedly argued that they are yet to receive any benefit from the development projects that have been initiated by the government in Balochistan.

  1. Reportedly, the Sui Gas Field in Balochistan caters to most urban households in the country. Despite producing about 45 per cent of gas for Pakistan, the province gets to consume a mere 17 per cent. Additionally, the Balochis get a nominal amount of Pakistani Rupees 6 for a 24-hour supply.
  2. The Pakistani government, in collaboration with China, initiated the development of the Gwadar port in the province, with an aim to better trade ties with Asia, Europe, and US. However, a large number of Punjabis and non-Baloch people were hired for the project, leaving an increasing population of Baloch engineers and technicians unemployed.
  3. Balochistan has one of the world’s richest reserves of copper and gold. However, as much as 16 kgs of gold is seized everyday by the Chinese under an arrangement with the government, which robs the Balochis of major economic benefits.
  4. Despite being one of the country’s key providing areas,
    • 80 per cent population of Balochistan continue to live in the absence of safe drinking water
    • 80 per cent people do not have access to electricity
    • 70 per cent children have never been to school
    • 63 per cent of Balochis live below the poverty line

While ethnic nationalist interests continue to worry Balochistan, a primary demand has also been about better control over the economic resources of the region.

However, the Pakistani government blames the nationalist struggle in the region for impeding the developmental process.

Political Subjugation By Islamabad

Balochistan makes up nearly 45 per cent of Pakistan’s territory but the Balochs comprise only 5 per cent of the total population, making them a minority in Pakistan.

Their representation in the National Assembly of Pakistan is also negligible (17 out of 342) which reveals that the Balochis have lost their say in policy formulations and are forced to adhere to laws that have been put in place for them by power honchos sitting in Islamabad.

Additionally, the Pakistan government centered in Islamabad has eradicated most of the Baloch activists and nationalists, calling them ‘foreign agents against the state’. This can be supplemented with the murder of Nawab Akbar Khan Bugti who was an ex chief minister of Balochistan.

ALSO READ Akbar Bugti: Remembering the Balochistan Hero on his 11th Martyrdom Anniversary

Pakistan And Its inherent Demand of Balochistan

Ever since the creation of Pakistan, it has been evident that the Pakistan government is more concerned with occupying the physical territory of Balochistan, with meager interest in its indigenous population.

The Pakistan army, on command of the government has employed every possible armory against its own people of Balochistan, in an attempt to contain the province within its seizure. Furthermore, army cantonments have been established at Dera, Gwadar, Bugti and Kohlu to gauge activity and movement of the Baloch people.

Additionally, despite occupying 45 per cent of Pakistan’s territory, the budget allocated to Balochistan is minuscule in comparison to its vast landmass.

In 2002, General Pervez Musharraf had striked a deal with China over the Gwadar port development as part of China Pakistan Economic Corridor (CPEC). Baloch people condemned the allocation of land to the rich businessmen of Punjab and Karachi and further lamented the unemployment stemming from the project. The move also instigated further violence in the region.

Balochistan
Gwadar port in Balochistan. Wikimedia

As of now, according to report, all 22 districts of Balochistan continue to suffer at the hands of the enduring insurgency with the tally of displaced people now crossing over 2 lacs.

In more recent times, the Pakistan army took aid of suicide bombers to tackle the ongoing insurgency. On August 8, 2017, as many as 54 lawyers became victims of a suicide attack, which is being touted as a State-funded action as the group included several Baloch activists who had been vocal about Pakistan army’s interference in state affairs.

ALSO READ Balochistan Suicide Bombing: Provincial Government Falsely blames India for the Attack

According to a report published in Dawn,prince of the now redundant Kalat state, Prince Mohyuddin Baloch who is now the  Baloch Rabita Ittefaq Tehreek chief,  had said that Balochis are not looking to wage wars. Until now, Balochis have not once attacked Pakistan, but only defended themselves.

He said the objective of their protests has been to draw the government’s attention. However, regretfully, no one is paying any heed to their cries.

Dr. Aasim Sajjad Akhtar had rightly quoted in an article in the Economic and Political Weekly that the “ethnic difference remains the single biggest fault line in Pakistani politics.”

The Balochistan insurgency thus, traces its roots in a ripe ethnic nationalism along with feelings of political and economic exclusion. This animosity among the country will continue unless Pakistan accepts its non-Muslim history.


 

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‘Returnships’: An Initiative Offering a Path Forward for Moms Who Want to Return to Work

Women re-entering the workforce often struggle to explain the gap in their resume and find employment harder to come by

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Returnships
Women who took break from work can now get back through returnships. Wikimedia
  • ‘Returnships’ are for individuals who have been out of the workforce
  • Women take break from work for childbearing or caregiving reasons
  • It is difficult for them to explain this break and find employment when returning to work

August 20, 2017: How does a former stay-at-home mom become an employee of a tech company that could be worth more than $1 billion?

For Ellein Cheng, mom to a 5½- and a 2½-year-old, the answer involved a “returnship.”

So-called returnships are internships that target men and women who have been out of the workforce, either for childrearing or other caregiving. It gives them a chance to retrain in a new field.

In Cheng’s case, the former math teacher and tutor took a returnship at AppNexus, an online advertising company.

Also Read: Google Buys Indian-Origin Professor Shwetak Patel’s Health Monitoring Start-up

For companies, returnships are an opportunity to tap into more mature and professionally diverse talent pools. For participants who may be out of the workforce, it’s a chance to refresh their networks, learn new skills and try on new roles.

Beneficial arrangement

For both parties, it’s a low-risk, low-commitment arrangement. Companies can achieve their goals to make the employee ranks more diverse. Job seekers can potentially find full-time work.

Cheng’s returnship was set up by Path Forward, a New York-based nonprofit that works with tech companies to coordinate 16-week, paid assignments for those who have been away from the labor market for two or more years because of caregiving.

The organization partners with tech companies that range in size from 30-person startups to behemoths such as PayPal, which has more than 10,000 employees.

“What these companies of every size in the tech sector have in common is rapid growth, and also not enough talent to fulfill their needs,” said Tami Forman, executive director at Path Forward.

Women re-entering the workforce often struggle to explain the gap in their resume and find employment harder to come by, Forman said.

“They often get feedback from companies and recruiters and hiring managers that makes them believe that they’ll never be hired, that no one will ever overlook their gap,” she said. The organization says it gets results — 40 out of the 50 women who have gone through the program were offered ongoing employment at the companies in which they interned.

Teaching background

In her job search, Cheng applied for teaching positions but was also open to other fields. The product support work struck a chord with her in its appeal for candidates “passionate about learning and teaching.”

The program gave both managers and participants the chance to see if a long-term opportunity would be the right fit for them.

It also provided a dose of inspiration.

Other employees were “inspired to see people stepping out of their comfort zone, taking a big risk, working on something they haven’t done before,” Lorraine Buhannic, senior director of talent acquisition at AppNexus, said.

For Cheng, the inspiration came from a more personal place — her daughters.

They are growing up “in a world that is changing so quickly with technology, and I just want to be part of that,” she said. “I want to grow with them, I want to learn with them.”

In the end, the match worked. After the returnship, AppNexus hired Cheng as a product support specialist.

Now working in the fast-paced world of online advertising, Cheng says she doesn’t feel she has left her old self behind.

“I’m still obviously learning a lot, because I’m switching careers completely, but at the same time, still bringing the teaching element part of it every day to work,” she said. (VOA)

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Ancient India Maritime History: Trade Links With Europe and Southeast Asian Nations

Excavations Provide Evidence About Ports that Played a Major Role in Overseas Trade in Past

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Ancient India maritime route
Ancient Indo-Oman maritime trade route. Wikimedia
  • The maritime history begins from the 3CE when the Indus Valley people initiated trading contact with Mesopotamia
  • Tamil Nadu being a coastal state had more than 16 ports across Chennai which had trade links with China, Egypt, parts of Europe
  • Presently in Tamil Nadu, a deep-sea port has been proposed in Enayam which would emerge as a major port for Indian cargo to be exported

June 27, 2017:

Before the incipience of air transport, mankind was dependent on sea links for transportation and trading of goods between continents. Sea was the major form of transportation in the past and even though people still use the sea for transport, most of the trading is now usually done through the air transport.

As we look back in time, the ports were the busiest place to be, because sailors were the only people who could get you and your goods across countries. In India too, we had ports down on the southern region so that we could access trade with all over Europe and Middle East countries.

The Ancient India maritime history begins from the 3CE when the Indus Valley people initiated trading contact with Mesopotamia. Indian Silk was one of the most traded product but later on, Indian spices took hold of most of the trading to the West surpassing Silk.

Tamil Nadu being the coastal state had more than 16 ports across Chennai and Tirunelveli which had trade links with China, Egypt, parts of Europe and South-east Asian countries. Archaeologists say ancient Tamil literature and excavations provide evidence about the existence of such ports that played a major role in overseas trade in the past.

C Santhalingam, the secretary of Pandya Nadu Centre for Historical Research told that these sea routes in Tamil Nadu can be traced to the Sangam Period which was from (3CE BC to 3CE AC) and said, “The historical coastal town of Kaveripoompattinam (Poompuhar in Nagapattinam district) recorded import of horses from Arab countries and finished goods from Indonesia and Sri Lanka. The port was also a major centre for the export of spices from South India.

Ancient port was built differently from the modern ports which are at the coastline as they were situated over the river mouths because the transporting ships in the past were not as big as the ones now, so the river mouths were the right places for safe docking of the ships.

Presently in Tamil Nadu, a deep-sea port has been proposed in Enayam in Kanyakumari district which would emerge as a major port for Indian cargo to be exported. The proposed budget for this port is 27,570 crore and the port would act as a hub for the global east-west trade route and also reduce the logistics cost for Indian traders dependent on transhipment in Colombo and Singapore giving rise to maritime link jobs.

prepared by Sumit Balodi of NewsGram. Twitter: @sumit_balodi