→ Narendra Modi: Nightmare or savior for India’s struggling economy?
With India’s growth slowing and the rupee losing 20 percent of its value since May, India’s middle classes seem prepared to overlook Narendra Modi’s reputation for divisiveness — if he can rescue the economy. Commentators sense that Modi’s campaign is gathering momentum while his rival, the Congress candidate Rahul Gandhi, remains in the doldrums.
The possibility of Modi becoming prime minister is even being credited with boosting the stock markets. And Congress leaders were very upset recently when investment bank Goldman Sachs suggested that a “business-friendly” BJP coalition might win the general election, calling Modi an “agent of change.”
So why exactly do investors like Narendra Modi? GlobalPost interviewed Ritika Mankar Mukherjee, an economist with Ambit Capital, one of India’s leading financial services companies.
JOHANNESBURG, South Africa — A Chinese property developer has a lofty vision for a pokey suburb of Johannesburg.
The plan? To turn Modderfontein, a dull, soulless area of semi-industrial sprawl, into the “New York of Africa,” with a financial district, 10 hotels, 10 shopping centers and an African culture theme park.
Hong Kong-listed Shanghai Zendai Property Ltd. on Tuesday announced it is buying a 1,600-hectare (3,953 acre) tract of land, and will make an investment of 80 billion rand, or $7.8 billion, over the next 15 years to develop the area.
“It will become the future capital of the whole of Africa,” chairman Dai Zhikong told a press conference on Tuesday, according to Bloomberg. “This will be on par with cities like New York in America or Hong Kong in the Far East.”
Brought to you by China: ‘The New York of Africa’
Photo by AFP/Getty Images
PARIS, France — Brian Spence looks at home amid the cardboard boxes of paperbacks and teetering stacks of books that crowd the Latin Quarter storefront of his Abbey Bookshop.
Sipping maple syrup-sweetened coffee, the smiling Canadian fondly recalls stumbling across rue de la Parcheminerie, the narrow lane where his Anglophone bookstore is nestled.
This was once the heart of the Parisian book trade. Originally named rue des Ecrivains for the scribes who copied manuscripts here, the street was renamed after their trade was replaced by parchment makers in the Middle Ages. Just up the street stands the famed Shakespeare and Company, a bohemian hub for English literature.
“Perhaps no other city values bookstores the same way Paris does,” Spence says. “We’re very spoiled.”
His is one of nearly 700 bookshops scattered across the city, which boasts an impressive one “librairie” for every 4,000 people. Independent bookstores are something of a national treasure, considered an important repository of French language and culture.
Historically situated in this university area, booksellers are part and parcel of the social fabric.
For the time being at least: In the age of Amazon, the institution is under siege as web-based retailers threaten the livelihood of small business owners by offering cut-rate prices online.
France vs. Amazon
Photo by Eliza Mackintosh/GlobalPost
SAO PAULO, Brazil — Dernival Albuquerque pins pictures of Mickey Mouse on the plywood wall above his thin mattress, and scribbles the iconic mouse ears in the corners of his ramshackle room.
Why the Mickey fetish?
“He’s just so … perfect,” said Albuquerque, 18, known to everyone as “Drix.”
The squeaky-clean cartoon may seem an odd emblem for a self-professed teenage rebel, who said he joined the first wave of massive street protests that rocked Brazil earlier this year.
But the young man’s predilection for perfection makes some sense, considering his surroundings. Perfection isn’t something Drix gets to see much.
His family shares a tiny apartment on an alley in one of the rougher areas of the Paraisopolis favela, or slum, in Sao Paulo.
A few weeks ago, his best friend, 17-year-old Silvana Silva, showed up. She’d been kicked out of her parents’ home. Now she shares his room, sleeping on an old piece of foam in one corner.
At night, they can hear rats scurrying around on the tin roof.
Despite Brazil’s boasted low unemployment and more than a decade of economic boom times, this country’s crowded, expensive megacities remain harsh places for the young and under-qualified.
Teenage rebellion, on a Brazilian budget
Photo by AFP/Getty Images
SAO PAULO, Brazil — The cows were dying of hunger.
Months of drought in northeastern Brazil left 34-year-old Natanael Melo and his 22-year-old wife, Vaniele Costa, with no option. They had borrowed money to buy food for their small herd, but that cash withered away like the crops.
It was time to leave.
That was six months ago. Today, the young couple’s vista is very different from the brittle cattle country they still consider home. Along with their 5-year-old, Nicolas, they live in a tiny apartment overlooking a trash-strewn alley in a large favela, or slum, in Sao Paulo.
The favela’s called Paraisopolis — which roughly means “paradise city.”
“I just want to go home,” Melo said, his eyes bloodshot from the big-city pollution. “I just want things to be like they used to be.”
Going home isn’t an option, at least not in the near future.
Brazil’s almost paradise: Here’s why they ask for more
→ The shame of a 'dirty name' in credit-crazy Brazil
SAO PAULO, Brazil — The dreaded default notices come in two forms: postcard-size white envelopes, unassuming in their diminution, and letter-size dark gray ones. Gray like storm clouds. Or gunmetal.
In the Paraisopolis favela, or slum, in Sao Paulo, Edivaldo Ferreira collects the letters for his neighbors. His small pet store is a de facto sorting office for local mail carriers wary of ducking into the slum alleys. They give the letters and bills to Ferreira, who stacks them in an old birdseed box behind the counter.
Increasingly these days, the mail consists of default letters.
Everyone in the favela is up to their neck in debt, the pet store owner said. Sometimes people don’t check their mail for a few days. They scurry past quickly, avoiding his shouts about the envelopes waiting for them.
In the heyday of Brazil’s so-called economic miracle of the 2000s, the country gorged on debt. Brazil’s banks lowered their underwriting standards, making credit suddenly easily available to new segments of the population.
And, as millions rose out of poverty, they turned to plastic and alluring installment plans to finance new homes, cars and goods.
Then, as the South American dynamo retreated in 2011 and 2012, consumer credit defaults spiked, rising by more than 20 percent in the first six months of 2011, according to Seresa Experian, a ratings agency.
A jet approaches Mumbai’s airport. A weaker rupee means cheaper travel for tourists. Credit: AFP/Getty Images
Who wins from India’s economic decline?
With the rupee’s slide, politicians, tourists and some businesses stand to profit.
by James Tapper
NEW DELHI, India — In almost every crisis, someone stands to profit.
The Indian rupee has dropped sharply in recent months, sliding from 54 at the start of 2013 to an all-time low of nearly 69.
Although the currency has recovered somewhat, the decline has harmed India’s fragile economy, and cost some investors a fortune. The country relies heavily on imported oil, and a weaker rupee means higher energy bills for consumers and businesses.
But for many exporters, call centers and travel companies, the rupee’s slide is good news — for the most part.
And the big winners in the rupee’s 20 percent fall against the US dollar since May come from a far more surprising constituency: Politicians.
India’s main political parties are believed to have placed their electoral war-chests off shore — away from the prying eyes of tax inspectors and election monitors in advance of the general election, likely to be called for May 2014.
“Political parties who have stashed the money away for precisely this purpose are now bringing it in,” Professor Jayati Ghosh told the Global Post. “These are big gainers. For the same $100,000 they are getting a lot more rupees.”
For the last general election in 2009, India’s political parties spent about $2 billion, of which a quarter was spent on buying votes for cash, according to the Centre for Media Studies, a Delhi-based think tank.
This time around voters seem even greedier, according to politicians. Some are apparently demanding a “red note” of 1,000 rupees to buy their support.
In June, a senior opposition politician was caught on camera complaining he had spent 80 million rupees to get elected – about $1.65 million back in 2009. At today’s rates that would be 105 million rupees, 26 times the maximum sum of 4 million rupees ($63,000) that candidates are allowed to spend.
Money accumulated from bribes and kickbacks can be hidden off-shore either through shell companies and bogus contracts or through “hawala”— an illegal Indian network used to transfer money without using banks.
→ US shutdown risk to global economy if protracted: ECB
PARIS, October 2, 2013 (AFP) - The US government shutdown could threaten not only the United States but also the global economy if it lasts, European Central Bank chief Mario Draghi said Wednesday.
The US shutdown “is a risk if it is protracted… it would be a risk not only for the US, but also the world economy,” Draghi told a news conference.
"But we don’t have that impression at the moment," he added.
HONG KONG — An Ohio man born and raised, Doug Smith, 54, never expected to end up doing business in China. Throughout his 20s and 30s he worked for a variety of Midwestern manufacturers, overseeing the production of car parts and industrial tools. By the early 2000s, he had his own machine shop.
But then in 2002 a downturn came, and he, like thousands of American manufacturers over the last decade, had to shut it down.
It was a twist of fate that brought him to China. Shortly after his factory closed, a former client that made water pumps asked him to help them set up a plant in the Middle Kingdom. Without hesitating, he said yes.
“Before I came to China, I knew nothing about it and didn’t think about it,” he said. “I was just like any manufacturer and was fat, dumb and happy.”
A Rust Belt victim transforms himself into a successful China hand
Photo by AFP/Getty Images
BEIJING — To woo clients, Will Latta, 43, used to spend three or four nights a week with coal barons from China’s inner provinces, drinking “baijiu” — a local grain liquor that tastes a lot like motor oil.
“Eventually, I had to draw a line,” said the Miami native. “It was getting bad — hallucinations and things.”
But it was all in the service of the long, patient, and by no means straightforward game of building a company in one of the rare industries where China can truly be said to be driving global innovation: clean energy.
Latta’s company, LP Amina, specializes in designing and installing clean-coal technologies in China’s small to mid-sized power plants.
Since its founding in 2007, LP Amina has grown from one employee (Latta) to roughly 130, split between China (its largest office) and Charlotte, North Carolina. By the end of 2013, it will have completed a total of 30 projects and turned over $35 million in revenue.
Most importantly, Latta says, this year LP Amina will make its first annual profit.
Getting there has been a long journey, and not always an easy one.
A yankee in China: There’s money in Beijing’s filthy air
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