Dubai – A Dark Story behind Concrete development

Dubai seems advance modern City in the Middle East. We can see nice buildings, roads, lavish life, MNCs, expensive items. We can see combination of Middle  East and West. We can see development with conservative sheikh, Islam.  

But

We can’t see

• Labours or Unskilled workers from India, Bangladesh and Pakistan doing work 6 days a week and 12 hrs a day.
• Their income less than 1 $ a day.
• Living 12 to 13 people in a single room.
• One toilet for 45 workers.
• No cooking, medical facility

3 million workers are in Dubai in horrible condition. Agents snatched passports. Agents cheated to needy people. Some of them do not have money to send their home because they are paying interest of loans. They are in complex situation.

We can’t forget condition of Abdullah Saudi King’s ex wife. She had written letter to UN representative for abusing and extreme condition.

• She was  in extreme and abusing condition in royal place in Jeddah in Saudi.
• She was locked in royal place from 13 yrs.
• She has 4 daughters and she does not have son.
• No clean toilets, No Maids, Leaking pipes
• Given poisonous substances to discremental health

Women and daughters are in abusing condition in Saudi. West can see only development in Dubai. Many English channels highlighted this issue but no one care. This is the side effect of extreme capitalism. Capitalist are abusing to women, girls, and poor people. This is the example of casino capitalism.

Can west move and forward to establish to creative capitalism? Need to remove such kind of horrible situation and move forward for inclusive thought and inclusive development.

Basel III - Objectives & Challenges

Objectives;-

• Improving to Banking Sector’s ability to absorb shocks arising from financial & economic stress.
• Improve Risk Management & Governance
• Strengthen Banks’ Transparency and Disclosures

Basel III is a set of international banking regulations developed by the  Bank for International Settlements in order to promote stability in the international financial system. The purpose of Basel III is to reduce the ability of banks to damage the economy by taking on excess risk. With that in mind, banks must hold more capital against their assets, thereby decreasing the size of their balance sheets and their ability to leverage themselves. While these regulations were under discussion prior to the financial crisis, their necessity is magnified as more recent events occur.

The Basel III regulations contain several important changes for banks' capital structures. First of all, the minimum amount of equity, as a percentage of assets, will increase from 2% to 4.5%. There is also an additional 2.5% "buffer" required, bringing the total equity requirement to 7%. This buffer can be used during times of financial stress, but banks doing so will face constraints on their ability to pay dividends and otherwise deploy capital. Banks will have until 2019 to implement these changes, giving them plenty of time to do so and preventing a sudden "lending freeze" as banks scramble to improve their balance sheets.

It is possible that banks will be less profitable in the future due in part to these regulations. The 7% equity requirement is a minimum and it is likely that many banks will strive to maintain a somewhat higher figure in order to give themselves a cushion. If financial institutions are perceived as being safer, the cost of capital to banks would actually decrease. Banks that are more stable will be able to issue debt at a lower cost. At the same time, the stock market might assign a higher P/E multiple to banks that have a less risky capital structure.

Year	2014	2019
Minimum Capital Equity Ratio	4.00%	4.50%
Minimum Tier 1 Capital	5.90%	6.00%
Minimum Total Capital		8.00%
Minimum Total Capital Conservation Buffer	8.00%	10.50%
Liquidity Coverage Ratio	60%	100%

Challenges; -

• Exercising Controls on the Capital, Liquidity, and Leveraging of Banks will ensure that they have to ability to withstand crises.
• Monetary Policy in Central Banks in Each Country (CRR, SLR, Repo Rate & Reverse Repo Rate) makes it difficult to uniformly implement BASEL Norms
• Its Hamper to Profit of Banks and Prevent to increase Salary of Employees in Banks.
• Every Central Banks have made their own selfish monetary Policy it is difficult to make balance due to implement of BASEL III Norms.
• It is difficult to depict exact calculation about Huge Financial Risk occur due to  experiment of Banks in Product   ( Liability & Lending).

Ruskin Bond – A Great Writer

 Ruskin Bond. Wrote first book “Room on Roof” in 1956 at 17 yr age. He written approximately 500 books include short stories, memoirs, play etc. Still Rusty remembered to all who read Ruskin. He covers Hills, bazaar, mountain, forest etc. His maximum books cover childhood days.  He did his education from boarding. He Said Boarding make Cynical.  He said Loneliness & Solitude stimulate to write. When he said to mom I want to be writer she scolded and said you are silly you become writer you go to army.  His book recorded some story based on dreams, He wrote about school friends and funny verses.

He remembered those days and said I was visited one book store in shanker market in Delhi, My Book placed bottom in pile of best sellers books. He took his book and put on the top of pile. Shopkeeper did not recognize him and said this book is not demanded by people. He felt bad but he did not stop writing because he enjoys writing. He did not disappoint and Now He is prominent writer. He remembered again and said I was working in Thomason Cook when I had received call from customer I am confused about twin bed and double bed. So, He did not carry job to long time due to this confusion.

He like window, without window how can any home complete. It is great philosophy if we think deep.

He said Indian Publisher paid good to writers and also give royalty nowadays but as same was not in past days.  He took help to UK publishers to publish his books like “Blue Umbrella”. 

He gives message to new writers respect language whose language you writing and establishes your tone.  You can’t be good writer unless you good reader.

Really He is Great writer. I remembered my childhood days. Those days can never come again. I attained The Penguin Annual Lecture by Ruskin Bond in India Habitat Centre. I feel Happy to enjoy this moment.

 Great writers always inspire you.

Cheers

Capital Inflow & Outflow – Taper Tantrum

Cash inflow & outflow is a strong medium to affect Global Economy. US Federal Reserve decided to hike its benchmark rates by 25 basis points. Several economists seem concerned that this could make capital too expensive for the global economy especially struggling emerging markets.  The question is -  will even small interest rate hikes by the U.S Fed make global capital expensive over the next year .

This activity project Capital inflow and Outflow in Global economy. it is a concern which country or emerging markets take hand in hand.

We can see China’s domestic investment rate declined from 47% of GDP in 2011 to 44.3% in 2015 (IMF estimate).  It is reasonable to expect economies like Japan, rate to low 35% over the next year.  Its seems saving rate will not go down quickly.  We have already seen China saving rate falling from 48.8% to 47.4% between 2011 to 2015. In other words rising consumption will not fully compensate slowing investment. The important perspective is that gap between China’s savings and investment will generate excess savings that will show up as a large current account surpluses. Indeed the surplus has already jumped from 136 billion in 2011 to an estimated 348 billion in 2015. In turn, the surplus will flood the world as capital outflow.

The pipeline of cheap capital from China is potentially so large and persistent that it could hold down the cost of long term global capital even if the US Fed keeps tightening, As the world economy is a closed system, someone will have to run a deficit in order to absorb the excess savings being generated by China. The emerging economies just do not have the capacity. Europe has but does not have to position to spend. This brings back to US world largest economy but remain Political Hurdle.

In other words, The Cost of long term global capital will only rise if the US absorbs most of excess savings emanating from China.

We have seen situation of global economy in period of 2007 to 2009 when financial crisis.

Over all every country monetary policy collectively impact the global economy, exchange rate of currency. Export - Import balance, domestic economy.  It is also decide Capital inflow and Outflow in Global Village.  Here the Question is what about least emerging markets.

 Can emerging markets or small country which economy is struggling to find place in global village?

What about exchange rate of currency of struggling emerging markets?

Developed Countries are making selfish monetary policy. It is ignoring condition of struggling markets. So, it could be that it is a step to demolish the small markets.

What is the role of IMF at this situation?

Capital outflow from large economy of world , can accept by Struggling emerging  markets ?

 At this time it is chaos in global economy, Seems currency war in global village. Need to take collective responsibility by developed countries as well as global financial institution like IMF and world bank .