World in its early childhood...
Overview

Education

The fiscal enrollment rates by age group are based on nationally-representative household surveys. They measure the proportion of people in a given age range reported to be attending school at the time of the household survey. Chile leads the pack with as much as 98% of male children in the age group of 12-14 attending primary school, followed by Argentina, where 97% attend school. Chile also leads the pack with as much as 99% of female children in the age group of 12-14 attending primary school, followed by Argentina. In 15-17 age group too and in both male and female, Chile leads the way.

Child Labour

Economic activity covers all market production and certain types of non-market production, including production of goods for own use. It excludes household chores performed by children in their own household. Hence, economic activity is a much broader term than child labour. In India, only 10.2% of the total children work as well as study, compared to Chile’s 92.8% of working and studying children. Even a country like Ghana can manage a figure of 63.6%. India scores well on the economically active children front, as just 5.3% of male children and 5.1% of female children are child labourers.

Maternity health

If one were to have a look at the table then fertility rate is quite high for women in Cameroon, followed by Bangladesh and Dominican Republic. In Bangladesh, 45.5% women give birth before they are 18, which indeed is an alarming sign. In Cameroon too, 33% women in 15-24 age group give birth before the age of 18. Bangladesh scores low on number of women getting prenatal care, too.

Deflation, deceit & destruction!
It’s clearly US pressure that is forcing Japan to fight deflation & support the dollar; a grossly wrong move...

Time: Somewhere in the near future. Place: Japan. Casualties: The yen. Calamity: A manmade financial earthquake. Epicentre: Bank of Japan (BoJ). International disaster scare: Very high for the entire global economy. Newspapers will be busy churning out stories that would tell everyone ‘what could have been done’, only to spark off a never ending blame game. Such a scenario is worth fantasising as the BoJ is on an intrepid mission to seemingly exterminate its own currency, & what’s troubling is the fact that the BoJ’s chances of pulling off this splendid suicidal blunder is quite high.

Now let’s draw up Japan’s path to this catastrophe, on which it has already traveled quite some distance. Post the stock market crash of 1989, Japan slipped into a deflationary cycle from which the recovery had been quite elusive. The BoJ had been fighting this downward movement of the general price level in the economy by using an expansionary monetary policy subsequently, which started by famously embracing a zero interest rate policy in February 1999. BoJ’s ultra-loose monetary policy had been & is being subordinated & supported by the relentless printing of yen (See figure 2 on the next page).

And this has quite some implications. Apart from the debilitating yen ‘carrytrade’ disaster that has held the global economy for ransom for quite some time, this dirt cheap liquidity has stoked a phenomenon wherein Japanese households have been hastily converting their yens into more profitable dollar assets. As Caroline Newhouse-Cohen, from the Economic Research Department, BNP Paribas confirmed to B&E, “Indeed, total investment in higher-yielding foreign assets by Japanese individuals reached $349.59 billion by end March 2007.” This mass exodus from yen could very well be the most critical reason we might see the currency’s doom.

But let’s ask a basic question. Is deflation, which BoJ is trying to fight so hard, really such a bad thing to happen to an economy? Peter Schiff , President & Chief Global Strategist, Euro Pacific Capital, revealed to B&E, “Despite the tendency of (Japanese) central bankers to argue that consumers are better served by rising prices rather than falling prices, ‘deflation’ was never a real threat to Japan. On the contrary, falling consumer prices are one of the natural rewards that people enjoy in market economies.” Truly, by contemporary consumerist economics, the monetary injections by the BoJ seem to be grossly misguided, as Euro-Pacific Capital’s Peter adds, “As the extremely productive Japanese economy worked to lower consumer prices, the inflationary monetary policy of the BoJ reversed those declines, robbing Japanese consumers of the benefits of falling prices.”

Moreover, expansionary monetary policies to prop up prices do not ensure economic recovery as they go on to cloud the investment decisions of producers & the business fraternity. And when these policies result in a sudden rise in prices & interest rates, the drag on the economy is most fatal. It’s one of the reasons why Japan has not been able to sustain its past recoveries. For example, during August 2000, the BoJ inanely tightened its stance by increasing rates by 0.25% only to restore it back to zero levels by March 2001 as the economy showed some vigorous deterioration.

So then, why is the BoJ fighting Kamikaze-like against deflation? Well, the answer to this question is quite deep rooted. Today, Japan fears that a rise in interest rates in Japan would adversely affect the precarious carry-trade imbroglio & money will move from dollar assets to yen assets, which will adversely affect the US economy, thereby leaving the Japanese economy in a similar situation due to extremely huge economic linkages. Japan is one of the major trading partners of the US. In 2006, Japan had a trade surplus worth $88.56 billion with the US. So, fighting deflation is only an illusion, the main aim of BoJ has clearly been saving the dollar.

Unless the Japanese government moves away from US pressure & allows its interest rates to move in tune to encourage economic growth, the Japanese economy might soon no longer be the world’s second largest...or the third...or...

Do you think crude prices will fall?
Many ‘expert’ analysts think so; and we’re calling their bluff right out here!

We are back again to the good old days of crude oil at $75 a barrel (September 2007 light sweet crude oil futures were at $75.79 on July 20, 2007, on NYMEX). But many so called ‘expert’ analysts are calling this a temporary movement. Guess what, we decided to call the ridiculous bluff ...

The reason for our Sherlockian approach can be found in the simplest concept of Peak Oil – which says that the world has reached the peak of oil production (if not, it will soon happen in the near future) & the era of cheap oil is over. Well, if one sweeps a view across Ghawar in Saudi Arabia to Cantarell in Mexico, or even to Daqing in China – some of the largest oil fields in the world – a seeming symmetric depletion of oil goes on to prove the same. Let alone the demand-supply mismatch, this has quite some implication on the prices – not because of speculation, but due to a rise in the cost of production of oil. It’s in the nature of humans to go for things which are easily accessible. So, once we run out of these available supplies, we will have to move to less feasible & economical wells. More money will have to be spent to pump out the same barrel of oil & transport it to the market place, thereby, jacking up the prices further. This phenomenon is already taking place & can be substantiated by declining Energy Return on Energy Invested (ERoEI), that measures the energy is generated by the amount of energy invested. It is to be noted that few oil wells at present are at an ERoEI of 5 as compared to an ERoEI of 200 in the past. Logically, & in true economic sense, this declining ERoEI can only be sustained if energy prices rise & rise higher than other items. Furthermore, ever increasing demand (see figure) will obviously push oil prices further upwards.

Michael Lewis, Global Head, Commodities Research, Deutsche Bank, confirms to B&E, “We believe the move from US$75/bb to US$60/bbl between August & September 2006 will not be repeated over the next few months.” Next few months? We suspect this range cannot be sustained more than for a short duration in the next few years too. Till alternative sources of energy explicitly become preferred usage sources, oil price is a bluff we’ll love to call again!