Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Monday, February 4, 2013

Caught in the ‘lasso’, us too :-(

Fall in demand in the US is driving the Japanese economy to contract faster than the US economy itself

Neither do they have a housing bubble, nor is their banking system saddled with that garbage called sub-prime. Yet, they are feeling the heat more than anyone else in the world. The extravagant adventures of the western cowboys have managed to thwart the languid Sumo economy once again, resulting into its fastest contraction since World War II, when the US ‘Small Boy’ and ‘Fat Man’ brought Japan to its knees. The Japanese economy has shrunk for the fourth consecutive quarter. To crown it all, with every quarter, the curve is going deeper and deeper into an abyss. The latest figures suggest an increased contraction of a mind-boggling 4% (15.2% anualised) in the first quarter as compared to 3.8% fall in the last quarter of the previous year. And it has all happened due to the recession in the US. Definitely, this makes for a great case study for global financial copulation where the woes of West have touched the Far East.

The reason is quite obvious – fall in exports. Over the years, Japan has transformed itself into an export-dependent economy and in such a case when exports register a mammoth 26% fall, then definitely there is no way it can dodge an economic slump. And that’s what is happening. As global trade is inching towards its biggest drop of 9% (10% for developed countries – WTO figures) since World War II owing to lack of demand and supporting credit lines, Japanese companies are forced to cut their production rampantly. This clearly gets reflected in fresh data released by the Ministry of Economy, Trade and Industry, Japan (for March 2009), which indicates a 34.2% (year-on-year) fall in industrial production and 32.4% in shipments. So much so that Japanese trade balance has now receded into the negative. Not only that, it has also resulted in withdrawal of expansion plans (capital expenditure has fallen by 10.4%), increased lay-offs and 1.1% fall in the household spending, one of the key indicators of a healthy economy.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Tuesday, November 6, 2012

The head of state for the third consecutive term

DHRUTIKAM MOHANTY feels that Orissa’s CM Naveen Patnaik can become the head of state for the third consecutive term

As a CM, Patnaik has taken many steps in areas such as economy, administration and social welfare. Specifically, during his tenures, the ever-decreasing financial condition of the state has improved. According to sources, in the year 1999- 2000, the state had to depend on overdrafts on 362 out of 365 days to manage the regular financial affairs. But today, the overdrafts have stopped. In 2001-02, the revenue deficit was over Rs 28,000 crore and the fiscal deficit was Rs.11,405 crore. They were down to Rs.11,190 crore and Rs.5,606 crore, respectively, in 2005-06.

But the CM he has not ignored his responsibility for social development and upliftment of the rural poor. Under his chief ministership, Orissa has launched many welfare schemes like Gopabandhu Gramin Yojana, a Rs.600 crore scheme for infrastructure development. It envisages the development of basic infrastructure such as electricity, roads and water in the rural interiors of 11 districts.

For the development of backward Kalahandi-Bolangir-Koraput districts, Patnaik has introduced a state-sponsored scheme known as Biju KBK Yojana in 2007. Under the Madhubabu Pension Yojana, the state has decided to provide pension to an additional three lakh people from January 2008.

In the beginning, Patnaik’s friends believed that ‘Pappu’, as they fondly call him, was too suave for the crass nature of Indian politics. His rivals held an identical view. They felt that he would soon return to his original vocation, literature and culture. But Patnaik has surprised, even shocked, them. Now, he is heading towards a third term as Orissa’s CM.
 

Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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