Search

Wednesday, April 20, 2011

The Lokpal plot thickens

The campaign against corruption, which assumed a concrete sense when Anna Hazare and his team introduced the draft Jan Lokpal Bill, is now sought to be debilitated. The political class that could wax eloquent in and outside Parliament on the need to cleanse the system and funded NGOs, that sustain themselves by running advocacy programmes to have systems in place to ensure probity in public life, are desperate to throw stones even while a process that shows some promise -the joint committee to draft a Bill to set up a Lokpal - has just begun its work. An audio CD that sprang up last week, purportedly establishing that Shanti Bhushan too was among those who fixed judges and judgments in return for hefty sums of money , was the cheapest of the tricks.

Those behind that dirty game could have paused for a moment and wondered as to whether someone indulging in such subversive acts against the judicial system would have mustered courage to declare that many of those who were Chief Justices of India in the past couple of decades were corrupt and stand by what he said even while hauled for contempt before the Supreme Court . It now emerges that the audio-CD was a construction , using technology that is commonly used in studios for benign purposes in the normal course, and circulated as a work of investigative journalism . One is reminded of the infamous attempt, some time in 1989, when the Bofors scandal knocked the bottom of Rajiv Gandhi's claim to be a Mr Clean. At that time, P V Narasimha Rao was shown to have organised documents to show V P Singh's son, Ajaya Singh, holding an account in a bank in St Kitts Islands. A pliable journalist who played ball in that game lost his job in the process. It was established that the whole story was concocted .

It is another matter that the journalist who played along was accommodated in the Planning Commission subsequently! It is in this context that the noises coming from a section of the civil society leaders raise concern. Aruna Roy certainly deserves the credit for foregrounding the RTI in its present form. The campaign by the MKSS achieved that. But then, she is now distancing from the process that has begun. And the worst that could happen was that she allowed Digvijaya Singh to speak on her behalf. The Congress leader sought to discredit the five-member team of civil society representatives and held that Aruna Roy and Harsh Mander must have been there. Since Roy has not distanced herself yet from that remark, it is fair to presume that she has acquiesced. She has the right, no doubt. But then, she must now clarify her differences and her apprehensions.

She cannot quarrel with the process. A joint committee to draft the Bill is still a more democratic and constitutional system than the NAC with the Congress president as chairperson (and the status of a Cabinet minister) and a large number of civil society activists, including Roy herself , and former bureaucrats as members. In other words, if the NAC can draft Bills and determine the government's policies and draft Bills for Parliament to pass, a joint committee is no less democratic. Roy may also specify the aspects from the draft that Anna Hazare and the four others with him are canvassing for in the joint committee; or also the draft Bill prepared by the government that is there. She may argue that section 8(2)( b) of the draft Bill that provides for a Lokpal with prosecutorial power is "authoritarian' ' or that section 8(6) that provides for scrapping section 19 of the Prevention of Corruption Act as unwarranted.

These are some of the differences between the two Bills that have been placed on the table. There may be other points, too. If someone from the civil society there argues that section 30 of the draft Bill, prepared by the Hazare team, that stipulates a timeframe for the various stages between a complaint is taken cognisance of and prosecution launched is draconian, it may be stated in the open. By not doing anything, it will be held that the noises against the process that is on since April 16, 2011 and billed to be completed before June 30, 2011, are only attempts to stall the job and not too different from the dirty game that was attempted by way of circulating doctored audio CDs. As for Harsh Mander , another member of the NAC, and for whom Digvijaya Singh spoke, it was only expected .

His enthusiasm to campaign against communalism does not take him to speak against the perpetrators of the 1984 carnage in Delhi and elsewhere . He has even argued that the principle of Truth and Reconciliation (that the people of South Africa resorted to after winning the battle against apartheid) be applied to the anti-Sikh riots of 1984 and not in the case of Gujarat 2002. Well. The principle of Truth and Reconciliation must not apply to either of the two! Be that as it may, it is imperative for the civil society and the government to let the process now on go through the task in real earnest rather than let the opportunity, wrested as it was, to be wasted.

The smear campaign against the framers of the Jan Lokpal Bill is reprehensible The joint committee that is drafting the Bill is no less democratic than the NAC Informed public debate about the Bill will be in the larger interests of society.

IMF mission coming to review economic reforms

WASHINGTON: The International Monetary Fund will send a mission to Pakistan next month to review the possibility of releasing the 6th and final tranche of an $11.3 billion loan package, Pakistani officials told Dawn.
Pakistan has already received more than $7 billion in five instalments. The 6th tranche, however, remains suspended since May 2010 because of the country`s inability to meet performance benchmarks attached to the standby arrangement.
Members of a Pakistani delegation, which came to Washington to attend IMF spring meetings, said they hoped the visit would lead to the release of the 6th tranche.
The Pakistani delegation also said that the World Bank had increased Pakistan`s portfolio to $4.5 billion over a period of three years.
As of March 1, 2011, Pakistan`s portfolio consisted of 22 active projects with the total commitment of $3.822 billion. The bank`s Pakistan trust funds portfolio has 55 active grants with a total commitment of $110.405 million.
The International Finance Corporation also has increased Pakistan`s portfolio to more than one billion dollars which is to be disbursed by the end of next year.
Pakistan became a member of IFC in 1955 and is considered a priority country for the corporation.
In fiscal year 2010 IFC committed over $516 million in the country, including $380 million in trade finance assistance to 11 banks. To date, IFC has committed almost $3 billion of its own funds in Pakistan.
The US Private Investment Corporation has set aside a fund of about $150 million to encourage investments in Pakistan.
OPIC is the US government`s development finance institution. It mobilises private capital to help solve critical world challenges and in doing so, advances US foreign policy.
Meanwhile, after a meeting of the US-Pakistan Strategic Dialogue Working Group on Economics and Finance in Washington on Monday, the US government encouraged Pakistan to continue its economic reforms.
“The United States recognised the measures that Pakistan implemented in recent months to expand revenue collection and control this year`s fiscal deficit,” said a joint statement issued after the meeting.
The United States “encouraged the government of Pakistan to continue efforts to strengthen the sustainability of its fiscal framework over time and to build broad consensus for these measures”.
“Major structural reforms, including in the energy sector, remain necessary to help create the conditions for strong growth and employment creation,” it added.
Recently, US Secretary of State Hillary Clinton advised Pakistan to broaden its tax base and brought wealthy and rich people in the tax net in order to become more financially independent.
Finance Minister Hafeez Shaikh led the Pakistani team in the meeting. The US team included Deputy Secretary of State for Management and Resources Thomas Nides, National Security Staff Senior Director for International Economics David Lipton, and Assistant Secretary of the Treasury Charles Collyns.

Pakistan unable to continue fuel subsidies

KUWAIT: Pakistan will not be able to afford subsidies on fuel this summer and much of the rising oil price burden will have to be shifted to the consumer, the country’s minister of water and power told Reuters.
Pakistan, where tens of millions of people live in poverty, is struggling to control inflation.
“Pakistan has not yet recovered from the 2008 oil price rise and we have no planned subsidies for the summer months because we can’t afford it,” Syed Naveed Qamar told Reuters in an interview on the sidelines of a ministerial meeting in Kuwait.
Pakistan imports about 80 per cent of its oil and spent around $3.99 billion on the import of 6.9 million tonnes of petroleum products and $2.45 billion on 4.3 million tonnes of crude oil in the first seven months of the July 2010 to June 2011 financial year.
“Every time oil prices rise this leads to instability in developing countries like Pakistan,” said Qamar. “And since the start of the year the government had tried to put subsidies on an on-and-off basis, but it’s really putting a strain on our economy,” he added.
Oil prices had reached $127 a barrel this month, the highest level in 2-1/2 years amid unrest in North Africa and the Middle East. Signs of slowing demand was one factor that had already led top oil exporter Saudi Arabia to slash its output by 800,000 barrels per day in March.
Earlier this month, Pakistan raised fuel prices by up to 13 per cent, which political parties were quick to criticise as fear built about the rising cost of living. The fragile coalition led by President Asif Ali Zardari halved the increase in petroleum.
“The subsidy issue is always a very sensitive one and causes a political stir,” said Qamar.
However, Pakistan faces external pressures from the International Monetary Fund, which has kept the country’s economy afloat with a $11 billion package agreed in 2008, wants the government to take unpopular decisions which include raising tariffs to help generate funds for the power sector.

UK banks lose Payment Protection Insurance challenge

UK banks have lost a judicial review that could have a major impact on whether more compensation has to be paid on mis-sold loan insurance.
Banks will now have to look back at past sales of Payment Protection Insurance (PPI), even if consumers have not complained.
Some estimates have said this could lead to a £4.5bn bill for the banks.
The British Bankers' Association (BBA), which said it was "disappointed" by the ruling, has 21 days to appeal.
The BBA also said banks would continue to put some fresh cases on hold until it had decided whether to continue its challenge in the courts.
Judgement 'clear-cut'
Thousands of people have already received compensation because they were mis-sold PPI policies, which are supposed to repay people's loans if their income drops because they fall ill or lose their jobs.
The banks challenged the Financial Services Authority (FSA) over guidelines it published last year which said banks should contact all past PPI customers and invite them to complain if they thought they had been mis-sold PPI.

How to claim

  • Not everyone was mis-sold payment protection insurance - it was appropriate for some people
  • For those who think they were mis-sold PPI, they should complain to the bank or loan provider that sold it
  • If, after eight weeks, there is no response, or there is a response that the recipient is unhappy with, then a complaint can be made to the independent Financial Ombudsman Service
But High Court judge, Mr Justice Ouseley, rejected the challenge.
Natalie Ceeney, the chief financial ombudsman, said: "This judgment is very clear-cut - and it confirms that the ombudsman's approach to PPI complaints is right.
"People have been waiting a long time while the banks' legal action has been ongoing. I would now like to see financial businesses showing real commitment to sorting out their customers' complaints efficiently and promptly."
Pay-outs
Some PPI sales proved appropriate but the banking industry has been accused of mis-selling them on a huge scale, generating many millions of pounds in profits by selling insurance that people were unaware they were paying for or did not need, or on which they could not claim.
Some of these people have been compensated, sometimes after their case was initially rejected by the banks.
During the judicial review hearings in January, the court was told that implementation of the new guidelines could cost the banks and credit card companies as much as £4.5bn, paid to millions of people.
Customers would have to be repaid their PPI premiums, plus interest, if the bank or other firm concluded that the customer would not have bought the policy in the first place if they had been fully aware of the policy's details.
Files The High Court judgement will affect millions of bank customers
A similar reimbursement could be due to those customers that paid for a policy in full up-front.
There have been more than 200,000 cases referred to the Financial Ombudsman Service about PPI in recent years, including 100,000 in the past financial year and now 5,000 each week. About three in four complaints have been upheld in the past.
The Financial Ombudsman Service said there should no longer be any stalling over fresh cases.
Complainants included people such as Gary Thomas, from London.
"I was sold a PPI policy - it amounts to 25% of the cost of the loan covering me for a five year period. In total it cost me £20,000 over a five-year period on a £60,000 loan," he said.
"I feel I was misled by this company and asked the ombudsman to look into it. It is nothing short of theft. They should be stopped from selling the insurance."
Banks 'disappointed'
The UK's banks, represented by the BBA, challenged the FSA's new requirements.
They argued that the FSA was effectively applying new rules to previous sales - even when those sales were regulated by other FSA rules.
"It was due to the widespread concerns that the FSA and the Financial Ombudsman Service had not properly applied the law in this area - and only having exhausted all other avenues for resolving the underlying dispute that a judicial review was sought," the BBA said.
"We are disappointed with today's judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal."
But the FSA, which said there had been 1.5 million complaints about PPI since 2005, said: "Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints.
"We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining."

Yahoo earnings fall as firm hits technology delays

Yahoo has said that a partnership with Microsoft is facing delays as it awaits improvements in technology.
The internet company, which has also announced a 28% fall in profits, is using Microsoft's search technology in a bid to improve advertising revenue.
But Yahoo said the system was not yet paying off and that a further roll-out was on hold while changes were made.
Meanwhile, Yahoo made profits of $223m (£137m) for the first three months of 2011, down from $310m last year.
The quarterly earnings figure was ahead of analysts' forecasts and sent Yahoo's share price 3.5% higher in after-hours trading on Wall Street.
'On schedule'
The mixed progress report from Yahoo comes two years into chief executive Carol Bartz's attempts to revive growth at the company.
She told reporters that revenue would not rise to levels that Yahoo experienced before it struck the deal with Microsoft until the end of the year.
Her previous forecast was that revenues would pick up mid-2011.
Yahoo said it was continuing to make progress on efforts to expand into the fast-growing mobile internet market, and to increase the amount of video advertising on the site.
Net revenue, which excludes fees paid to partner websites, was $1.06bn in the first quarter, just higher than the $1.05bn average of analyst expectations but down 6% from the $1.13bn recorded a year earlier.
Ms Bartz said: "Our turnaround is proceeding on schedule, and we are very confident Yahoo is heading in the right direction."
Steve Weinstein, analyst at Pacific Crest Securities, said there were clear signs of improvements at Yahoo.
"The growth in their display business, when you peel everything back, continues to look good," he said.

Intel says it will run Google's Android on tablets

Intel, the world's largest chipmaker, has confirmed it will run tablets with Google's mobile operating system.
Chief executive Paul Otellini confirmed it had received the code for Honeycomb, Google's latest version of its mobile platform designed for tablets.
He also said that Intel chips will be in smartphones, where it has lagged behind rivals, in the next 12 months.
The company said on Tuesday that its first quarter earnings rose by 29% to $3.16bn (£1.95bn).
Mr Otellini said it was working with Google, Microsoft's Windows system and Nokia's MeeGo platform on tablets - a market dominated currently by Apple's iPad.
Shares in Intel gained more that 6% in after-hours trading.
'Outstanding results'
The company said strong spending by businesses on new computers helped the company overcome a serious product design error and supply chain disruption from Japan's earthquake and tsunami.
For the same period a year ago, Intel earned $2.44bn.
Revenue was $12.8bn, 25% higher than 2010's $10.3bn.
The company also gave an outline forecast for the current quarter for revenue equal to the first quarter's of $12.8bn.
In a statement, Mr Otellini, said: "These outstanding results, combined with our guidance for the second quarter, position us to achieve greater than 20% annual revenue growth."
The figures showed sales holding up strongly, despite fears that the growing popularity of smartphones and tablets will begin to eat into the computer chip business.
That business suffered a setback earlier this year when a fault was discovered leading to a recall.
Leading computer makers, including HP, Dell, Samsung and Lenovo had to halt sales of some machines in February because of problems with certain Intel chips.

Japanese exports fall 2.2% in March due to tsunami

Japanese exports fell more than expected in March, as damage from last month's earthquake and tsunami affected shipments.
According to the finance ministry exports declined 2.2% from a year earlier, the first drop in 16 months.
Shipments of cars tumbled 28% as the sector continued to be hit by shortfall of parts and slowdown in production.
The earthquake and tsunami has damaged factories and disrupted the supply chain.
Shipments of semiconductor products and electronics also fell by 6.9%.
For Japan's two major export destinations, shipments to the US declined 3.4% from the previous year, while shipments to China rose an annual 3.8%.
Analysts say the disruption in the supply chain is making it difficult for Japanese manufacturers to get back on track.
"It is very frustrating for automakers and other manufacturers," said Hiroshi Watanbe of Daiwa Institute of Research.
"Despite steady demand abroad, they simply could not make their products due to a supply crunch following the disasters," he added.

Start Quote

There hasn't been much progress in restoring factory output, so exports will fall in April”
End Quote Yoshiki Shinke Daiichi Life Research Institute
Worsening situation
While the Japanese economy struggles to deal with the effects of the earthquake and tsunami, analysts warn that the situation could get worse in the coming months.
They say the current numbers are not a true indicator of the full impact of the devastation on the country's exports, as many manufacturers would have used up existing inventories.
"At least for March, some manufacturers were able to keep limited output by relying on stock. But by now, stock will be gone, forcing companies to completely shut down production," said Hajime Inoue of Japan Research Institute.
Mr Inoue warned that the fall in exports could widen to as much as 20-30% in the coming months.
Analysts say that while the country has been grappling with the aftermath of the earthquake and tsunami, much works needs to be done before manufacturers can start operating at full capacity.
"There has also been damage to infrastructure, like ports and airports," said Yoshiki Shinke of Daiichi Life Research Institute.
"There hasn't been much progress in restoring factory output, so exports will fall in April," he added.
Power problems
Lights are turned off to save energy before rolling blackouts in Tokyo The earthquake and tsunami has resulted in a shortage of electricity supply in Japan
One of the biggest issues crippling Japan's component makers is the shortage of power.
Last month's earthquake and tsunami has caused damage to nuclear and conventional power stations in the country, resulting in electricity supply shortages.
Japanese manufacturers are having to come up with measures to keep their production lines running while trying to cope up with a shortfall in power supply.
The situation is likely to become more complicated as the demand for electricity reaches its peak in the coming summer months.
Analysts say that is going to affect shipments from the country.
"Due to power supply constraints expected in the summer, a full pick up in exports is unlikely until at least the end of this year," said Yuichi Kodama from Meiji Yasuda Life Insurance.

Gold price hits record at $1,500 an ounce

Gold nugget Analysts are divided over whether the price can go much higher in the near term

The gold price has risen above $1,500 an ounce for the first time after concerns about global economic recovery lifted the metal's appeal as a haven.
In Hong Kong trade, gold hit a record $1,500.70 an ounce, which traders said was mainly due to Standard & Poor's downgrade of its outlook on US debt.
Silver also touched a 31-year high of $44.34 an ounce.
"In a word, sensational. Everything's feeding into this, sovereign debt, weak dollar, inflation," said one analyst.
But analysts were divided about whether the price could go higher and are waiting to see if trading in Europe and the US continues the momentum seen in Asia.
Jonathan Barratt, at Commodity Broking Services, said: "We often see a $20 rally after breaking a big number, then a pullback.
"We will see what Europe and United States do with this. $1,510 or $1,520 look possible, but prices are starting to look a little stretched up here."
Darren Heathcote, at Investec, said: "The market is so fickle at the moment and it wouldn't surprise me if we saw a sell-off."
Some market watchers see gold consolidating at its current level as it waits for the next reason to push higher.
Natalie Robertson, commodities strategist at ANZ, said: "I don't see prices convincingly past that level in the next few days unless we see something very negative, probably related to the eurozone sovereign debt.
"But we do see gold very well supported at the $1,490 level," she said .
Silver continued to soar, rising to a 31-year high for the fifth consecutive session.
Not only is silver increasingly seen as a haven, but there is also rising demand for industrial consumption.
"Silver is still in a clear bull trend that targets $50 next," said Taso Anastasiou, a UBS technical strategist.