November 15, 2024

You are here: Home / Archives for economic reforms

Greece Hit by General Strike to Protest Austerity

July 16, 2013 by Leave a Comment

The nationwide walkout, called by the country’s two main labor unions, which represent some 2.5 million workers, shut tax offices and other government services, reduced hospitals to emergency staff and disrupted travel. Trains remained in depots and international flights were to be suspended between noon and 4 p.m. as air traffic controllers joined the action. Public transport workers were running a reduced service to allow Greeks to join protest rallies planned for Athens and other major cities.

The upheaval came ahead of a vote scheduled for Wednesday night in Parliament on legislation bundling together a new barrage of economic reforms — including a contentious streamlining of the Greek Civil Service. The bill must be passed if Athens is to secure the first installment of $10 billion in rescue loans approved last week by euro zone finance ministers.

Greece’s troika of foreign lenders — the European Commission, the European Central Bank and the International Monetary Fund — have pledged the country two bailouts worth a little more than $300 billion since the spring of 2010 but are dispensing the aid in tranches to keep the pressure on authorities to adhere to commitments to change.

The reforms that have most angered the unions are plans to put 25,000 civil servants, including teachers and municipal police officers, into a so-called mobility plan by the end of the year, docking their wages ahead of forced transfers or dismissals. Another 15,000 workers are to be laid off by the end of 2014.

Local government employees have been occupying city buildings this week to protest the changes which, the unions say, will aggravate a deepening recession and add to the ranks of the unemployed who already account for more than 27 percent of the population.

“We will resist all those whose wrongheaded and dead-end choices have led the Greek people into poverty and wretchedness,” said the main private sector labor union, Gsee, which called the action with the civil servants’ union, Adedy.

A unilateral decision last month by Prime Minister Antonis Samaras to shut the state broadcaster ERT, putting some 2,700 employees out of work, nearly brought down his shaky coalition after the junior partner quit in protest. The debacle illustrated the difficulties the administration would have in honoring pledges to creditors to slash a Civil Service that has been cosseted for decades.

Despite the vehement opposition of unions and workers, Greece’s lenders, prodded by Germany, have pressed authorities to stay the course of reform. Public anger at austerity is expected to peak on Thursday when Germany’s finance minister, Wolfgang Schäuble, is to visit Athens.

Article source: http://www.nytimes.com/2013/07/17/world/europe/greece-strike.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Yen Falls Against the Dollar as the Rally Ebbs

June 3, 2013 by Leave a Comment

TOKYO — Less than a month after the yen breached 100 to the dollar, celebrated as a milestone for this export-loving economy, the yen is back on the wrong side of that symbolic threshold. Shares traded in Tokyo have lost 15 percent of their value since May 23, as a euphoric rally suddenly gave way to nerve-racking market swings.

It is still too early to tell whether the recent southward turn in Japanese markets is a temporary correction, or whether it is the end of the road for a spectacular rally that seemed to foreshadow a resurgence of the Japanese economy after years of deflation and disappointing growth.

But the market retreat reflects a growing anxiety among investors over the program of bold monetary stimulus, fiscal spending and economic reforms instituted by Prime Minister Shinzo Abe, intended to help Japan break out of its economic stupor. The yen, made weaker by these policies, made Japanese exports more competitive globally.

“Until May 23, all attention was on how far the market could rise. But within a week, everyone is talking about how far it could fall,” Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, wrote in a research note published Monday.

The wild market gyrations, Mr. Fujito said, threatened to make predictions from even the most seasoned of market experts almost meaningless.

“Turning to analysts who said just a week ago that stocks might rise to 18,000, or 20,000, is hardly an effective mood-stabilizing move,” he said. At times like these, investors might be wise simply to “wait and see.”

Early Tuesday in Tokyo, the Nikkei 225 index, which is trading around 13,000, slipped 0.5 percent in the opening minutes before a slight rebound, then appeared to lose direction, slinking back into negative territory.

On Monday, the index fell 3.7 percent, the fourth rout in eight days. The dollar was trading at 99.43 yen, after the Japanese currency strengthened overnight, crossing over the 100 yen mark against the dollar for the first time since early May.

Other, immediate factors have propelled recent market moves, analysts say, including comments from United States Federal Reserve officials that seemed to suggest a tightening of monetary policy later this year; a rise in long-term interest rates in both the United States and Japan; profit-taking by overseas hedge funds and other foreign investors who had piled into Japanese equities; and high-frequency trading that has magnified market swings.

But there has also been an increasingly cold-eyed analysis of the risks of Mr. Abe’s economic push. Japan’s central bank has seemingly been caught unaware by volatility in long-term interest rates, brought about by its pump-priming and large-scale purchases of government bonds.

The government pushed through a sizable budget last month, but in the eyes of many investors, that is more of the same from a country that has long poured money into public projects, staving off a deeper decline but with little to show toward long-term, sustainable economic growth.

Article source: http://www.nytimes.com/2013/06/04/business/global/yen-falls-against-the-dollar-as-the-rally-ebbs.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Changing of the Guard: Signals in China of a More Open Economy

December 10, 2012 by Leave a Comment

The trip was Mr. Xi’s first outside Beijing since becoming party chief on Nov. 15. Mr. Xi visited a private Internet company on Friday and went to Lotus Hill Park on Saturday to lay a wreath at a bronze statue of Deng Xiaoping, the leader who opened the era of economic reforms in 1979, when Shenzhen was designated a special economic zone. Mr. Deng famously later visited the city in 1992 to encourage reviving those economic policies after they had stalled following the violent crackdown on pro-democracy protests in 1989.

“Reform and opening up is a guiding policy that the Communist Party must stick to,” Mr. Xi said, according to Phoenix Television, one of several Hong Kong news organizations that covered the trip. “We must keep to this correct path. We must stay unwavering on the road to a prosperous country and people, and there must be new pioneering.”

In the months before the transition, there were widespread calls, including from people close to Mr. Xi, to adopt more liberal economic policies and even to experiment with greater political openness as a way for the party to maintain its rule. Without much success so far, reformers have long been encouraging the leadership to move toward a more sustainable growth model for China, one that relies more on domestic consumption rather than infrastructure investment and exports, and where state enterprises play less of a role.

Mr. Xi, known as a skillful consensus builder, has kept his ideas carefully veiled throughout his career, but his trip to Shenzhen is the strongest sign yet that he may favor more open policies. In a speech in Beijing on Nov. 29, Mr. Xi spoke of the “Chinese dream” of realizing the nation’s “revival,” which, besides being a call for renewal, also signaled strong nationalist leanings.

Mr. Xi’s father, Xi Zhongxun, was a revered senior official handpicked by Mr. Deng to help shape the new economic policies and oversee the creation of the Shenzhen zone. Mr. Xi’s mother lives in Shenzhen, and he visited her on his trip, according to Hong Kong news reports.

“If he indeed went to Shenzhen, that means he intends to make reform a subject of priority,” said Li Weidong, a liberal political analyst. “That would really be a phenomenon.”

Mr. Li cautioned, though, that the so-called reform policies that followed Mr. Deng’s 1992 southern tour, in his view, “ended up being fake” because China’s boom resulted in widespread corruption and the expansion of state enterprises at the expense of private entrepreneurship.

When Mr. Xi’s predecessor, Hu Jintao, became party chief in 2002, he was seen by many as a potential reformer, but his tenure was marked by conservative policies. For his first trip outside Beijing as party chief, Mr. Hu went in December 2002 to Xibaipo, a hallowed site for the revolution, where he reiterated a speech given by Mao Zedong.

Over the weekend, video footage from Phoenix Television showed a line of minibuses and police cars winding its way through Shenzhen. Mr. Xi and other officials walked outdoors in dark suits. The party’s official news organizations did not immediately report on the trip, but some prominent mainland Chinese news Web sites cited the Hong Kong reports.

Mr. Xi’s early moves as party leader seem aimed at emphasizing national “revival,” a theme he highlighted when he appeared on Nov. 29 with the party’s new seven-man Politburo Standing Committee in a history museum at Tiananmen Square. According to People’s Daily, the party mouthpiece, Mr. Xi stood in front of an exhibition called “The Road to Rejuvenation” and said, “After the 170 or more years of constant struggle since the Opium Wars, the great revival of the Chinese nation enjoys glorious prospects.”

He added: “Now everyone is discussing the Chinese dream, and I believe that realizing the great revival of the Chinese nation is the greatest dream of the Chinese nation in modern times.”

The emphasis on a “Chinese dream” is particular to Mr. Xi, and could prove to be a recurring motif throughout his tenure. The notion of a grand revival — “fu xing” in Mandarin — has been popular with Chinese leaders for at least a century, but Mr. Xi appears to be tapping more deeply into that nationalist vein than his recent predecessors, perhaps recognizing that traditional Communist ideology no longer has popular appeal.

Patrick Zuo contributed research.

Article source: http://www.nytimes.com/2012/12/10/world/asia/chinese-leaders-visit-to-shenzhen-hints-at-reform.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

India Agrees to Let In Foreign Retailers, Again

September 14, 2012 by Leave a Comment

The Cabinet’s decision — after a similar proposal was withdrawn under withering criticism last year — immediately generated optimism that a government plagued by scandal was finally breaking out of the political paralysis that had stifled reforms for months.

“This is a landmark decision in India’s economic reforms process,” said Rajan Bharti Mittal, whose retail company, Bharti Enterprises, has a joint venture with Wal-Mart.

Prime Minister Manmohan Singh said the reforms were made to spur economic growth and to attract foreign investment.

“I believe that these steps will help strengthen our growth process and generate employment in these difficult times,” he wrote on his Twitter account, appealing for public support.

However, political opponents and even some allies, decried the decision to allow in international supermarket chains, saying it would hurt small retailers and farmers.

“(It) will lead to job losses for millions of our people,” D. Raja, a Communist Party lawmaker, told the NDTV news channel.

The Cabinet also agreed to allow foreign investment in airlines and to sell stakes in state-owned companies. On Thursday, the government decided to reduce fuel subsidies and allow the price of diesel to rise, a move hailed by the business community but criticized by political allies and opponents.

The decision on retail investment Friday would allow foreign firms to own a majority stake in multi-brand retailers here for the first time. However, individual states would have the right to decide whether to let the retailers operate from their territory.

States led by the ruling Congress party would be most likely to allow them, meaning the big cities of New Delhi and Mumbai would have new shopping options.

U.S.-based Wal-Mart, British-based Tesco PLC, French-based retailer Carrefour and others have been interested in entering India, a country of 1.2 billion people where retail is the second-biggest industry behind agriculture.

Commerce Minister Anand Sharma said India badly needed the infrastructure investment that would come from these firms. Currently, about 35 to 40 percent of produce rots before it gets to the stores, he said.

Under the Cabinet decision, at least 50 percent of the foreign investment would have to be in back-end infrastructure, such as processing, distribution and storage.

“It will generate large numbers of jobs in rural India for our men and women,” Sharma said.

The government said farmers would benefit because less of their produce would rot, small retailers would become more competitive and efficient and consumers will get lower prices and better quality. The policy would also bring in badly needed inflows of investment and foreign currency.

The government had agreed on the same proposal last year but then withdrew that decision because of protests from coalition partners, a capitulation that badly damaged its credibility with international investors.

Since then, economic growth has fallen, with business leaders and analysts blaming the government’s inability to make needed reforms.

Kunal Ghosh, a spokesman for government ally Trinamool Congress, said his party continued to oppose the plan but would not say whether it would withdraw support from the coalition.

The government relaxed rules on foreign investment in the broadcast industry and in power exchanges, which provides a platform for companies to buy and sell power.

The government also agreed to sell minority stakes in its oil, copper and aluminum companies as well as its Metals and Minerals Trading Corporation.

The main opposition Bharatiya Janata Party criticized the surprise decisions.

“We consider it as a betrayal of the country, betrayal of the Parliament by this government,” said Balbir Punj, of the BJP.

The government’s decision on airline investment would allow foreign airlines to own up to 49 percent of an Indian airline. India’s airline industry has expanded enormously in recent years, but only one airline has been able to turn a consistent profit. The government-owned Air India and the private Kingfisher have both suffered from labor strife and financial problems.

Aviation Minister Ajit Singh said the decision “sends a very clear message to a sector that has been under stress.”

But it was not clear if any foreign airlines would be interested in buying a minority interest in some of India’s most struggling airlines.

The government also made a key change to its decision earlier this year to allow foreign retailers selling only a single brand to own 100 percent of their stores, a decision largely seen as aimed at bringing furniture retailer IKEA to India.

The previous decision forced the company to source 30 percent of their products from small cottage industries. Now, it can source that 30 percent from any Indian industry.

___

Follow Ravi Nessman on Twitter at www.twitter.com/ravinessman

Article source: http://www.nytimes.com/aponline/2012/09/14/world/asia/ap-as-india-retail.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,