April 29, 2008

Inflation - Biggest of all demon

Soaring food prices but it's not just food prices and rice in particular whose prices are heating the roof. All other commodities used by society in day to day life has become dearer. It can be that seen that Inflation in most of the countries are running high these days in mid 2008. Let's see India for example and count the steps the govt and central bank is taking to contain inflation. You will find similar reports coming from China and other economies of similar size like Russia and Latin America. Ideas and measures that have been taken by these economies and discussed below can be extended to other similar developing and under developed economies.
1) Letting the local currency appreciate if it is not pegged. It is hoped that this will allow imports to become cheaper as the local currency will appreciate. This is supposed have some cooling effect on the soaring prices. This has been helpful to keep the price rise of imported items low but general public may not be able to feel it as most of Asian economies is highest impacted by crude oil only in the list of items to be imported and crude oil is already subsidized by most of these government. This option can not be used by China and similar economies whose currencies have been pegged against standard currency like USD or EURO or similar basket of currencies.
2) Raising CRR instead of raising Repo or Reverse Repo rates. Most of the economies in region prior to the sub prime bust in US and food problem were registering robust economic growth. This was leading to good poverty eradication in those economies. Though the distribution of newly generated wealth from booming economy was not evenly distributed which was another problem to be addressed in order to stop future social division. Still wealth was flowing into the economy and standard of life was going up. So political brass is very sensitive against killing the growth story the economy was registering. This is leading the government and central bank to raise CRR as a result trying to suck money out of circulation. Thinking of money as another commodity means lesser availability of it will make it costly. So less of this commodity[money] would lead to buy more of other commodity[Rice and other food items]. At least increase in interest rates were done lot more cautiously as it was certain that killing the growth story of the economy means being thrown out of power in next elections/voting.
Seen a report in Indian newspaper reporting increase of CRR.
3) Raising Deposit rates. Economies like China and similar economies where political stability is virtually guaranteed and there are very little if any chances of govt being overthrown have used this option very frequently. This option compared to hiking the CRR leads to controlling the inflation much sooner. More ever China GDP growth rate has been very high and there was worries about government to cool off the economy and avoid over heating. So this mechanism works well for Chinese economy.
4) Removal of duties and banning exports or levying high taxes for exports. Most of economies which import edibles to feed their population had certain duties in place for import. Since then in order to contain inflation and making these items come in more to the country at a cheaper cost government and authorities have abolished the duties or reduced it to bare minimum. This has not been very helpful for all food items but have certainly been helpful for certain food items and commodities like Metals. Reason for this not working for all food items is that economies which were exporting these commodities have banned exports in order to be more cautious and to ensure supply in the local economy in future. In cases where banning exports completely was not feasible because of local of international equations high export taxes have been slapped.
5) Price control by government instead of market determined price for certain commodities. In certain economies government has moved to the extent of fixing the prices of certain food items and commodities like metals to keep the inflation in control. Though these are not prudent measures at all and if last longer than endurance limit of the economy[This again depends upon how robust the economy is] will lead closure of businesses and if it is government control then fiscal deficit ultimately leading to currency devaluation. This is again calling for higher inflation. For weak economies with poor democratic roots and head strong government and authorities these can even lead of hyper inflation causing even more pain to the consumers and producers of the economy.
Many political and economic leaders have been crying foul that problem is emanating because of supply side constraints. Over time demand for these commodities have been increasing either because of population growth world over or because of increasing life standard around the world. So if it is a supply side problem then there are only two solutions :-
A) Increase supply. This would call for more focus and investment in R&D by the economies. Given the current money supply which government have been tightening it will not be an easy thing to do. How ever going through and enduring the hardship in planned and sustained manner is the solution to these kind of systemic problem economies face.
Bring back the resources which have been diverted towards other causes back. There has been an report by UN slamming developed world for doing this and throwing the entire world into this chaos. Developed world have to give and donate and help in the human cause to eradicate poverty world over and improve standard of living in poorer economies.
Additionally some unscrupulous element in the market who are in involved in hoarding. There idea is to make some money to sell later inflation will cause prices of these commodities to rise. Though most of the economies have rules against such practices but corruption makes the implementation more difficult to implement them. As has been traditionally seen Corruption is normally higher in poorer economies.
B) Reduce demand. All the consumers have to give up part of their non essential consumption even if it is affordable for them. This will lead to reduce demand for those items and reduced price. This will allow these resources to be diverted back to produce more essential commodities and increasing their supply.
Other option is teaching common about birth control in poorer economies. This will certainly means in long term demand will decrease and consumers would be reduced.

April 17, 2008

Tibet - Olympics - Chinese Human Rights Record

Olympic is the time when China is getting a lot of attention about it human rights abuse. Seeing over recent past and some of statistics, I feel there is something that Chinese can do make people all over the world more comfortable. Lets look at few of these :-
[1] China does not give journalist and media freedom to report and cover events live from it's territory. When problems started in Lhasa on 10th March like in past China started with banning foreign journalist from going to Tibet region. Media in the Chinese territory is in anyway under government control and it decides what to be known to public and world. This many times leads to reports or cases which is and are worse than ground reality. If Chinese government feel what it is doing is the correct thing in case of any event unfolding on it's territory it should allow journalist to report and relay live to keep the world over aware. This has advantages like healthy criticism of government and even NGOs who are always involved in human tragedies world over. Chinese rulers keep thwarting any international comments saying don't involve in internal matter. I think this is one of most important that needs to be changed to get China more integrated to the world socially and politically. Chinese communities living the world over are lovely people and have these in them inherently. They need to tell their relatives back home on main land about this and help them on this.
[2] Chinese support to other rulers who are perceived as human right perpetrators. Chinese are providing support to Darfur in Africa, Junta in Myanmar and Pakistan, Autocrats in North Korea and perceived fundamentalists in Iran. I think there are many more such instances in Africa which lets the world to look upon Chinese rulers as close to demons. All these just sends wrong signal about Chinese rulers to the world at large. Even if Chinese forces would not have dealt high handedly in Tibet to crush the Tibetian protesters in absence of allowing media world over to capture the events it will definitely be perceived so. It's akin to Chinese government thinking world at large is colluding against China if there are support to protesters around the world. China must allow Social and Human values a place along with its economic interests and desire to remain in control of 1/5th of world human population.
[3] I have so many friends who are Chinese. I have so many colleagues who are Chinese. I perceive them as great thinking individuals who love peace and prosperity. They shun violence more than other races of world be it Western civilizations, Middle East, Indian peninsula. I don't know many Africans so can not compare them against Africans. In spite this when you compare China outnumbers it's distant second Iran in Capital punishment. According to an news channel during the Olympics itself about 350 will face the gallows. In yr 2007 officially 470 people were executed in China where as the unofficial estimates puts it at 8000. I think world's oldest civilization and people at land of cradle of most of the ancient knowledge deserves better.
[4] Perceived belief that Chinese government does not all religious freedom. Though Chinese constitution allow religious freedom to Chinese population on ground religious teachings and followers have been reported to suffer a lot. It is widely reported and believed that this manifestation of Chinese government towards all major religions in China is because they perceive it as a threat to their throne and to remain in power in future. Chinese government feels that religious freedom is allowing democratic behaviors to take root and external contact which fuels these even faster.
So, is it that like Zimbabwe and Mynamar, Chinese rulers are just trying to remain in power for ever. If it's so it will taste the character of our Chinese brethren. I believe Chinese population and civilization is good and smart enough to out do any oppression for long.

April 16, 2008

Tibet, China, Olympics Torch and Future - I want to say something

These days we all have been reading a great deal about Olympic Torch and Tibet's protest against Chinese oppression. Western world definitely seem to be more and more sympathetic to Tibetians and side with them in their voice against China and human rights violations in Tibet by Chinese government machinery. Media both print and digital including internet is filled with views, events and analysis if and how these will impact Chinese rulers in anyway.
Let's start with hot topic of torch relay disruptions in western world. Media has been reporting that Tibetans had lot of support from French and even some of the French politicians were vocal about their support to Tibetans. Media was mute about state support for the Tibetian in US and UK and for that matter many other countries. Though media and blog have been reporting wide support from human rights groups in most of these countries. Now there has been lot of patriotic and nationalistic[Choose your words] whip in China against these western countries and calls to boycott French products as a tit for tat. Let look at it deeply. I find two forces at play :-
[1] Human Right is a topic close to heart in developed world and obviously that includes western countries. It comes naturally to humans once your basic needs are met and you are better off and you are moving up the value chain. So society there has lot of support for human rights. I think Japan may not be faring as well as other western countries probably because it is surrounded by third world and developing economies.
[2] Money or trade and economic sense is at play when it comes to state support. Compared to other countries France does not have as deep trade relationship with China as US, UK and other countries where Tibetian protest had some or other form of state patronage. Look at the blow links and table on the right hand side.
For Chinese economy France does not appear as top export destination or import origination.
Similarly for French economy China does find a place in top export destination of origination of import.
Now for US economy China a 3rd top export and top import origin and for UK economy 5th top import origination is China.
[3] Chinese response especially from youth brigade again is a very common human psychological reaction. For any country which is economically growing on a scorching pace nationalistic/patriotic feelings run high during these years. Anyway these will die away once the fuel stoking the fire get exhausted which in this case seems to be Olympic games and media to some extent.
I have something for my Tibetian friends as well. I will suggest them to look at Australian and HongKong's history. Both of these were associated with British rule for long long time. Now what I want to take from here is this :- Chinese economy has been developing very fast few years. Chinese government is investing significantly in Tibet region as well. For now it may feel that locals are not benefiting from these but only native Chinese are reaping the benefits. It's all a question of time. Economic prosperity fruit will have to reach you and your entire region. I guess 15 yrs to 20 yrs maximum. There after Tibetians will not have to protest against Chinese as it is being done today. It might become more and more of dialogs and no human right violation. Tibetians may start thinking that it's better to remain integrated with greater China for economic gains and have more and more of autonomy from political, social and religious point of view. 15 to 20 yrs down the line with more economic prosperity these autonomy would come lot more easily but I think not without the economic development of the region. Look how easy was Hong Kong hand over to China by UK or how easily Australia deals with UK monarchy. Think of it - would it have been so easy for Australia and Hong Kong 40 years ago. I feel what Hong Kong and Australia achieved on 40 years Tibet with mighty China will achieve in 15 years.

April 13, 2008

Rice shortage - Switching to other food will be helpful

Lately I have been reading lot of articles and concerns about rising inflation in poor countries in Asia, Africa and Latin America. It has always been mentioned that cost of food has gone up. Rice is the staple food in most of these countries. In the news and articles when it came to poorer countries I always saw Rice being mentioned. Wheat hardly being mentioned in similar context. For other food items like edible oil and vegetables which were mentioned at times background was always developed countries or larger economies like China and India.
I thought of trying to really understand what is happening as I have normally seen that there is always a lot of hue and cry and media attention on few things causes more and more attention to it and circle continues and then it fades out all of a sudden once the public is saturated. People don't really understand and human pysche is wired to best run in herd mentality. Anyways, I started looking for historical prices of various staple food items. I found some very useful information. I just believe that my interpretation of the data is correct I managed to extract free of cost on the web.

Historical Rice price. Choose the year from the drop down below the chart.
Historical Wheat price. Choose the year from the drop down below the chart.
Historical Soyabean meal price. Choose the year from the drop down below the chart.
You can choose and look at the other food items historical price as well. There are links below on these pages.

There is no doubt that food prices have increased. But this is an healthy increase as per normal inflation rate and economic cycle. World had seen rapid economic expansion is last 3 to 4 years. Only exception is Rice whose price over last 2 or 3 months that has really shot up. Fundmental supply-demand economics could be at play. Supply seems to have been chocked by natural and artificial reasons. There have been many other articles in the media that land acreage for food production has come down significantly over last 2 to 3 years. How ever I have not read how of this switch has been from Rice producing land acerage. I believe it must have been proportional reduction from all crops and not just Rice. Given this the conundrum is why has Rice price shot up so much over last 3 to 4 months. Another economically detrimental pratice may be the reason for chocking the supply of Rice. Plausibly Hedge Funds trying to make profit and getting more and more involved in commodity market after their profitable run in stock and real estate market. Rice stocks world wide are not maintained deep unlike other food crops like wheat, corn, edible oil. Here stock maintenance by countries I am referring to is not in tonnage but reserves/tonnage production & consuption. This ration seems to be low. This could have lead Hedge Funds and PEs to calculate that it is easiet to manipulate and make profit by trading in Rice.
Two solutions are coming to my mind to help poorer nations and impacted communities :-
1) Diversify the food habit of the population to include other food items like Wheat, Corn and Soyabean. This will reduce the dependency on the Rice and this could help. When the food pool becomes bigger then it would be as much difficult for HFs and PEs to manipulate the market for Rice. Powerful nations and their regulators will come in to stop HFs and PEs.
2) Develop commodity exchange in the region instead of depending on US and London commodity exchanges. This is long term solution and with great economic benefits. With this goverment together can control and regulate economically detrimental trends.
Getting the land acerage back to be devoted to Rice and other food articles from bio diesel is not the long term solution as the set of poor countries facing the Rice price manipulation also bleed because of crude oil cost. Crude oil cost has gone up approximately 3 times in last 5 years since IRAQ invasion. This will only help to stop media outcry as a household without light does not draw as much attention as a house hold with hungry stomach. In reality the house hold and community is infact bleeding more because of hydrocarbon prices in search of a better living condition.

April 12, 2008

Plight of Maids in Singapore - Economic suppression to begin with

Over last 5 years of stay in Singapore I have employed several domestic helpers[maids] and have seen and briefly talked to several other maids employed by other friends and colleagues.
Singapore government allows maids from a fixed set of countries to be brought into Singapore. Details of the process, procedure, cost and time can be found from this official website.
There is healthy competition in the market between different agency who supply employers with maids. How ever it seems to be a niche business with very good margin. There is high demand as well in the market for the maids as this allows employers for both the partners to work, to take care of house hold chores, baby sit, look after elders etc, etc. Employing a maid is not very costly either compared to other countries like UK and US where I think it would surely be a luxury to employ a maid legally. Though often it has been seen that employers are not happy with maid to start with because of hidden costs, lost of privacy to some extent at home and other reasons. If we look at the statistics that is produced by CASE majority of the complaints are against maid agencies. Complaints against maid agency out numbers any other category by a huge difference. Any society has mixed set of people there are some employers who are errant and similarly there are some maids who work towards detrimental interest of their employers. How ever something seriously seems to be amiss when it comes to maid agencies. As per me it calls for a reality check by the government agencies.
Now coming to economic hardship that maids have to go at the start of their work life in Singapore which at times doesn't take off and they are thrown into financial chaos. Most of the maids I have talked to including those who I have employed normally pay about 1000 SGD to a broker back home in their countries for getting employed in Singapore. Many a times these ladies have to take loan keeping their house or land or any other similar property as mortgage. These collateral have an average value of about SGD3000 to SGD4000. These loans are not financial transactions under the aegis of any govt approved bank or credit distributing financial organization. These are mostly illegal money lenders who hold clout in the locality maids belong to. This makes these loans very exorbitant and it is kind of guaranteed that if the maid has to return from Singapore for any reason with in about 3 years from taking up work in Singapore she and owner of the collateral will have to forgo the collateral. Moving on and coming to the payments they have to make to the local maid agencies. Normally it's 4 months salary of the maid goes to the maid agency. Maid agency also collects about 4 months salary from the employer. Looking at from employers point of view it may not be a very significant sum but you can think from economic point of view how profitable a biz it is. Biggest barrier for more and more people entering into this biz I think is the moral obligation towards society. This biz looks like you are making money at the cost of other human beings. As per me and my interactions if you are able to deal with this barrier you can have an economically profitable setup in 4 to 6 months of time.
Coming back to the economic plight of the maids. Maids don't end up paying just 4 months of salary but on an average 6 months. This is because agencies will charge additional 2 months for transfer to another employer. As maids are still in learning phase employers often ask for a change.
I have tried talking to 2 of the maid agencies about the deduction that maids have to take from their monthly salary in Singapore. Agencies have always told me that a lot of cost is involved in getting a maid to Singapore and it's not really very profitable. Biggest cost they count is air ticket. Once you tell them these poor maids have paid about 1000 SGD back home for tickets and other expenses. They will promptly tell you they have no idea about this. It's between the maid and their off-shore agent. Putting it in perspective it's like an credit card loan @ 16% of about 10 times of the monthly salary keeping your house as collateral. I am help less and can not do much about but I hope spreading this word will make an impact and some people or organization may come forward with a solution with help from government.

April 10, 2008

Recovering from flexible bronchoscopy

It's 7 days now since the day the surgery was done. Left flexible bronchoscopy was performed before VATS to remove the cyst between food pipe and heart. In case of any complication left thoracotomy was to be done to remove the cyst. This in case the cyst would have attached it self to any of the other vital organs in the thorax [upper chest] region of the body and removing it safely using pin hole surgery was not feasible.
Before the surgery I was informed by the surgeon and his team of different complication and some very bad possibilities that can happen to any human undergoing this kind of specialised procedure. This was a bit scary but I think the law dictates that this be informed to the patient. There are very minor possibilities for the following complications and mishap :-
Cardiac Arrest
Post surgery bleeding - At times another surgery is required to fix the cause of bleeding.
...few more that I don't remember...
Anyway I will suggest not to pay much to attention to these as it may increase your anxiety level just before the surgery. I was advised by the doctors that very likely following would happen during the course of recovery after the surgery if no complications happen.
1 day in the ICU
3 days to remove the tubes from the chest
4-5 days of recovery time in the hospital ward
4-5 weeks of rest at home before resuming active duty as an employed adult

Till now I have been lucky that I have been recovering really well. Recovery rate in the hospital was much better than speed at which I am recovering at home. I was not taken to the ICU at all. After about 3 hours of supervision post General Anaesthesia from OT[Operating Room] I was directly brought into the ward. Here when I was back in my sense I was not having pain in the chest area but I was having some irritation in the groin area. I was felling as if I wanted to pass urine. I was also feeling as if my groin is already wet. When I tried to feel the area I found that a pipe is connected to my penis. I asked the attendants I was informed that Urinary catheterization has been done as part of standard process for this surgery. This will keep sucking all the urine and I don't need to pass urine. It would be removed tomorrow. I persisted why is it wet then. They checked and refitted it again as seems there was some leakage happening. They seems adjusted it again and it was so painful. They told me it's fine now and there would be no more urine leakage. They changed the bed linen and they had put me on nappy. Such huge nappies, I had never seen before. I think I was still stable and not really irritated by this pain and uncomfort. I tried to sleep with the pain and constant drive to urinate. I could not sleep at all. I asked the attendants to remove the catheter so that I can pass urine normally and more importantly I can sleep. They told me I have to pass urine and motion on the bed till the tubes from my chests are removed[this was about 3 day away]. But the pain in the penis and constant false signal by body to urinate was really bothering me and I was becoming irritating[my wife tells me] and aggressive in my conversation. I told them I am willing to urinate in urine bottle but this catheter has to be removed for me to sleep. Surgery has been done in chest and why am I being tortured for urinating. They heeded and consulted the doctors. With Doctors consent my catheters were removed. I think it was one of the most painful medical experience of my 32 years of life. Even removing the catheters was so excruciatingly painful. After about 15 mintues of catheter removal urge to urinate had subsided. I was as sleep amidst constant hourly blood pressure and temperature check. Next day morning first chest X-ray was done. Next one again in the evening. Next day morning doctors informed me that X-ray are looking good and there is no more fluid coming out of the tube as well as of now. They will observe for 4-5 hrs and if all goes well tubes would be removed in the after noon. They took the third and last X-Ray in the morning before removing both the tubes from my chest. I was feeling great thinking that I am recovering really fast. Doctors wanted me to be discharged next day[Friday] but then thinking about my naughty kids[twins] at home I thought it's better to stay back for 2 more days and recover here. I was passing motions and urine normally. I feel lucky that I didn't had to pass motion from the hospital bed. While passing urine I use to have burning sensation because of the post effect of catheters. I think only mild problems I was having was :-
Blood in the sputum
Very shallow breathing
Burning sensation while urinating
All of these are not surprising but expected condition after bronchoscopy and VATS and Urinary catheterization. I was discharged on Monday noon time with medicines to take care of pain of varying degrees.
On Tuesday bandage was to be removed from the wound and I would take my shower after about 5 days of sponge bath. When one of the bandages were removed wound still seem not to have healed and so my wife did not dare to remove the bandage from 2nd wound. As was advised in the hospital while being discharged to go to a GP and get the wound cleaned and bandaged again. I could take my shower a day later as I was feeling more comfortable on Wednesday. GP had put water resistant bandage on both the wounds. Other than that two other problem I am having as of now while writing this post are :-
Recurring fever - I am taking Panadol for this about twice daily as when I feel feverish.
Burning sensation while passing urine.
Mild Gastric - This was expected in hospital as side effect of the pain killers. How ever I am having the symptom now. Expecting it to away soon.
This is the reason I feel that recovery in hospital was better compared to home. I guess one of the reason for speedy recovery in hospital was optimum rest before going for the surgery.

Following link provide useful additional information on VAT :-
Patients Guide to Thoracoscopy
Patients Guide for Cardio Thorasic diseases