Sunday, July 1, 2012

Global Power Shift Since Industrial Revolution

The Industrial Revolution marked the beginning of a major shift in economic, military and political power from East to West.


  A research letter written by Michael Cembalest, chairman of market and investment strategy at JP Morgan, and published in the Atlantic Magazine shows how dramatic this economic power shift has been. The size of a nation's GDP depended on the size of its population and labor force in agrarian economies prior to the Industrial era.  With the advent of  the Industrial revolution, the use of machines relying on energy from fossil fuels dramatically enhanced labor productivity in the West and shifted the balance of power from Asia to America and Europe.



The shift in power was not just in economic terms. Enabled by machines such as steamboats and weapons like the repeating gun, the West engaged in long distance trade and warfare that led to the colonization and exploitation of Asia and Africa. The new colonies were used as a source of  cheap raw materials for European factories and the colonized people served as captive customers for their manufactured products.

History of Per Capita GDP of Selected Countries. Source: Angus Maddison


While development of Asian and African nations stagnated and their share of world GDP dropped precipitously, their colonial rulers in the West prospered. Social indicators like literacy and life expectancy showed little improvement in the colonies, according to data compiled by Professor Hans Rosling.  For example, his Gapminder.org animations show that life expectancy in India and Pakistan was just 32 years in 1947.  In Pakistan, it has  jumped to  67 years in 2011, and per Capita inflation-adjusted PPP income has risen from $766 in 1948 to about $3000 in 2011. Similarly, literacy rate in undivided India was just 12% in 1947. It has increased to about 67% in India and 62% in Pakistan for people 15 years and above.




Indicators such as per capita energy consumption and Internet usage confirm the rise of Asia, particularly Asian giant China's. China's per capita energy consumption now stands at 68 million BTUs, about a fifth of US per capita energy consumption, but it's rising rapidly. Pakistan is at 15 million BTUs per capita, Bangladesh at 6 million BTUs and Sri Lanka at 10 million BTUs.In terms of Internet access, China now tops the world with over 500 million users, more than twice the number of Internet users in the United States.  Among the world's top 20 are South Asian nations of India with 120 million Internet users and Pakistan with 30 million users, according to Internet World Stats.


While there has been progress on economic and social fronts in South Asia, the combined GDP of SAARC nation is still  accounts for less than 4% of the world GDP. China has significantly increased its share and now accounts for more than 10% of the world GDP marking the biggest economic shift since the Industrial Revolution. China's growing economic clout will ultimately translate into political and military power in the international arena.

All indications are that the pendulum of power has just begun its swing  eastward in the last decade. It could be a century or more before the effects of this swing are truly felt in terms of the exercise of economic, military and political power on the world stage. Meanwhile,  the 21st century is shaping up to be another American century in which United States'  extraordinary power will not go entirely unchallenged by multiple potential adversaries, including China.

Here's a video of a BBC documentary about Al Andalusia or Muslim Spain:

 

Related Links:

Haq's Musings

Pakistan Military Industrial Revolution

China's Checkbook Diplomacy

Education Attainment in South Asia

Pakistan Needs Comprehensive Energy Policy

Social Media Growth in Pakistan

Is America Young and Barbaric?

Godfather Metaphor for Uncle Sam

44 comments:

Anonymous said...

Notice that pre islamic India was the world's largest economy by far!
Also as per Agnus Maddison the per capita income was 133% that of Europe!

In Islamic times India by and large was the world's second largest economy but per capita income at its zenith of prosperity(Akbar) was about 70% of Europe.
By Aurangzeb's time it was down to about 50% of Europe when he died in 1707.

But in any case this is very lazy journalism.

1.History does not progress in straight lines.

2.The past is absolutely no indicator of the future.Greece?Egypt?Iraq?

Riaz Haq said...

Anon: "its zenith of prosperity(Akbar) was about 70% of Europe.
By Aurangzeb's time it was down to about 50% of Europe when he died in 1707."

So what is India's per capita GDP now in post-Islamic period? 5-6% of Europe's after 65 years of independence?

Doesn't India now have more poor, hungry ad illiterates than any other nation on earth?

http://www.riazhaq.com/2010/08/63-years-after-independence-india.html

Mahesh said...

UNDP overall literacy rates show India at 75.6% and Pakistan at 58.2%. Your blog data (which refers to another blog of yours!) show that, 15 years and over, India is at 67%. This makes sense because literacy rate is increasing and higher among the younger population.

Pakistan on the other hand, for 15 years and over, has a literacy rate of 62% which indicates that literacy rate among the youth is 54%(50% of population) - literacy is declining!

Shams said...

The energy consumption data that shows Norther countries using a higher number of BTUs per person is quite misleading. The fact is that the Northerners have to burn a lot of fuel to keep themselves warm in their very long winters.

Riaz Haq said...

Shams: "The energy consumption data that shows Norther countries using a higher number of BTUs per person is quite misleading. The fact is that the Northerners have to burn a lot of fuel to keep themselves warm in their very long winters."

Hot climates also require huge per capita energy consumption for air-conditioning & cooling. In fact Saudi Arabia (257 million BTUs) and Arizona (220 million BTUs) both use a lot of energy....about 3.5-4X of the world average of 70 million BTUs.

Mayraj said...

21st century American century. Now way!

Power shift in US started in 2011-year white babies became the minority. The downward drift from this will be felt as soon as they start to join labor force (will be before high school period eds as they will not graduate from it in majority) and more white residents and look for government aid (as they have no savings)! At this stage will stop trying to project itself outwards. This is warning to all counties relying on US market. Its days as being a market for their gods is going to be much reduced.

Riaz Haq said...

Mayraj: "21st century American century. Now way!"

Don't be so sure.

The key to America's dominance has been and continues to be its technological prowess.

It's on display nowhere better than in multi-ethnic and multi-cultural Silicon Valley which is predominantly nonwhite. Enable by top talent and risk capital, there is huge research & development going on here on everything from biotechnology to nanotechnology and advanced AI. If you get a chance, please read about the work of Singularity University. Abundance, a recent book by Peter Diamandis, sheds some light on it.

This is what will maintain significant US lead over competitors in the 21st century.

http://books.google.com/books?id=3b6LvlWObYUC&printsec=frontcover&dq=Abundance&hl=en&sa=X&ei=1_jwT9PEAcLY2gWR-q3NCg&ved=0CFsQ6AEwBg#v=onepage&q=Abundance&f=false

Riaz Haq said...

Mahesh: "UNDP overall literacy rates show India at 75.6% and Pakistan at 58.2%."

You are overstating India's literacy rate from UNDP.

UNDP data is outdated and shows 56% (2008) for Pakistan and 63% (2006) for India. For youth literacy it shows 71% in Pakistan and 81% for India.

http://unstats.un.org/unsd/demographic/products/socind/

Harvard researchers Robert Barro & Jhong-Wa Lee have much more detailed ad more recent data for 2010. It shows 38% of Pakistanis and 32.7% of Indians age 15 and above have had no schooling. That leaves 67% of Indians and 62% of Pakistanis 15 and above who can be considered schooled and literate.

http://www.barrolee.com/

Anonymous said...

no it is you who are overstating PAkistan's.

Literacy is not exclusively schooling.

MAny informal schooling programs exist.

When I was a school student back in the 1990s I had to teach a poor sweeper how to read and write Hindi COMPULSARILY,my social sciences grades were based on how well he scored so this wasn't a can write my name only type of eyewash.Many such 'each one teach one' initiatives have been around for atleast the past 30 years.

Mayraj said...

Do not think past will be prologue to future. That tide will not return. US basically built itself up in era its rivals were not competitive.
What technology prowess do you think will happen in future with little funding? Venture capital goes primarily to IT and biotech.
And IT scales up outside US! Govt will have little money to spare. Spends most on entitlements or defense-the crumbs go to rest.
Tide started turning the moment they started becoming competitive.
And it is harming itself by its malinvestment. Right now US has about same middle class amount as Mexico-just under 50%! Middle class has plunged in US. The hey days were when US economy was doing well there were no economic rivals. Since then less students will enter college, far fewer will even graduate high school. Ad the seniors will be looking to Government for more entitlement spending than even now!

Shams said...

I guess you missed my point, again.

The issue is that the numbers used in your article make one believe that simply measuring how many KW-hr you consume in a year represent something of value. They do not. For example, the temps range from 35-65 deg. F round the year where I live. We rarely use heat or airconditioning. All my light bulbs are LED and use no more than about 12W.

Therefore, there is a grave need to normalize your article's statistical data in a manner somewhat similar to the one done for GDP vs. purchasing power parity adjusted GDP.

Riaz Haq said...

Shams: "The issue is that the numbers used in your article make one believe that simply measuring how many KW-hr you consume in a year represent something of value. They do not. For example, the temps range from 35-65 deg. F round the year where I live. We rarely use heat or airconditioning. All my light bulbs are LED and use no more than about 12W."

While I agree that climate control and efficient light bulbs make a difference in energy consumption, I find that your explanation still doesn't account for 20X difference between South Asia & US or the 4.5X difference between China and the US.

The bulk of the difference can only be explained based on the difference in the level of industrialization in these societies.

Let me give you a simple example.

When I was in Pakistan recently, I saw a couple of gardeners trim a hedge for days with just manual shears. In the US, I have seen a similar job done by one man in a couple hours using motorized hedge trimmer that uses gasoline.

Similarly, I have seen human sweepers using manual brooms working on large areas just shuffling dirt in India and Pakistan..a task that a machine does much better and faster routinely in the US.

Everything from transportation and communication to cooking and cleaning and recreation uses more energy in industrialized societies than in developing nations.

You can find hundreds of similar examples of how every day work is done in developed countries using machines that require more energy consumption.

That's what industrial revolution did...it replaced human and animal labor with energy-hungry machines.

It's often said that it would take several hundred slaves in the age of slavery to do the work each American gets done using energy-consuming machines these days.

Riaz Haq said...

Anon: "no it is you who are overstating PAkistan's.Literacy is not exclusively schooling."

In that case, I'm understating Pak literacy rate by only counting those as literate who have had the benefit of schooling.

Riaz Haq said...

Here are excerpts of a Wall Street Journal story on energy crisis in India:

India is facing an energy crisis that is slowing economic growth in the world's largest democracy.

At stake is India's ability to bring electricity to 400 million rural residents—a third of the population—as well as keep the lights on at corporate office towers and provide enough fuel for 1.5 million new vehicles added to the roads each month.
-----------
Vast tracts of rural India lack electricity. Even in such business hubs as Delhi's suburb of Gurgaon, companies employ backup generators because of regular outages. Factories are forced to curtail production. And vaccines that require refrigeration go bad because of spotty service.
----------
Energy imports will be costly for India's already shaky public finances, economists say, and the government will have to pass on higher costs to consumers and businesses. That won't be easy. Residents depend on government subsidies to lower prices for electricity, auto fuels and cooking gas.

Last month, Standard & Poor's cited India's yawning 5.8% budget deficit and inability to reform fuel subsidies as reasons it was considering downgrading the country's debt from investment-grade to junk status. Fitch, another ratings firm, later joined S&P in cutting its outlook on India's sovereign debt from "stable" to "negative."

"India has a very distorted system of subsidies," Jaipal Reddy, minister for petroleum and natural gas, said. "But how, in a vibrant democracy like in India, do you change the system suddenly?"

The country's energy crunch can be overcome, he said: "We'll have to pay for more, that's about all. It does not weaken the long-term growth story."
-----------
India's efforts in April to strike a long-term gas supply deal with Qatar faltered over price, about $20 per million British thermal units, or more than triple the cost of Indian domestic gas.

Exploration for gas and oil discoveries isn't going well. Since 1998, the government has issued 87 exploration blocks to companies through competitive bidding. Only three blocks have gone into production.

Interest in India is waning among the global oil companies that dominate exploration: Eight of the 37 companies that bid in the last round of auctions were foreign companies, down from 21 in 2008.

Mr. Reddy, the oil and gas minister, said he was considering allowing firms to sell what they produce at higher prices to attract more investment. Companies complain that government price caps are too low.

Policy makers are resigned to costly imports for now. "In all probability the import dependence in primary energy is going to increase," said Mr. Ahluwalia of the Planning Commission. "The real issue is, 'Can we pay for that energy?' "


http://online.wsj.com/article/SB10001424052702304331204577352232515290226.html?mod=WSJINDIA_hps_MIDDLELSMini

Riaz Haq said...

Here's an Indian Express story on Gurgaon power cuts:

Morning traffic was brought to a standstill on Tuesday by Gurgaon residents protesting acute shortage of power and water.

The city has been battling severe power and water crisis, made worse by the delay in arrival of monsoon and the heatwave.

As per official estimates, the power demand in the city has surpassed previous records and continues to rise.

On June 28, the demand was to the tune of 1,528.33 lakh units (the highest demand for one day), against 1,127.45 lakh units on the same day last year, said Amit Kumar Agrawal, Managing Director of Dakhshin Haryana Bijli Vitran Nigam (DHBVN).

To rein in the shortfall, the Nigam has announced that starting Wednesday, all industries will be given just eight hours of power. They will be supplied power from 8 am to 12 pm and 3 pm to 7 pm.

Residents, on the other hand, blame the sharp rise in demand to the mushrooming of small guesthouses in buildings meant for a single family.

“In front of my house there is a 120 sq yard area, which has been turned into living quarters for 20-odd families. The power demand will automatically shoot up,” said Anthony Cruz, a resident of DLF Phase-III.

Residents of both old and new Gurgaon claim outages stretch to as long as 16 hours a day. This, in turn, has affected the water situation in the city.

“The Basai water plant is supplying very little water, while the private water plant is almost dry. Power cuts leads to non-storage of water and residents have to buy water. We shell out Rs 800 for around 5,000 litres of water,” said Cruz.
------------
DHBVN Superintendent Engineer Sanjiv Chopra told Newsline, “There has been a 20-22 per cent shortfall in power supply in Gurgaon. While the demand is around 200 lakh units, we have been able to supply 150 lakh units. Sometimes the supply went down to 130 lakh units. We are trying to make the situation normal.”

Power officials said supply could dip further as Yamuna Nagar units I and II of 300 MW each and Hisar unit-I of 600 MW are closed. Hisar unit-II of 600 MW and Jharali (Jhajjar) units I and II of 500 MW each had tripped, resulting in sharp reduction in availability of power in the state.

About 150 MW power from Lanco Amarkantak Project is also not available due to non-availability of coal, officials said.


http://www.indianexpress.com/news/power-cuts-bring-gurgaon-to-halt/970033/0

Indian said...

The share of Japan has reduced in the last decade and so has the share of Russia and Germany. If you look carefully, Indian share is expanding but at a much slower rate when compared to China.

Riaz Haq said...

Indian: "The share of Japan has reduced in the last decade and so has the share of Russia and Germany. If you look carefully, Indian share is expanding but at a much slower rate when compared to China"

India's share of world GDP has been flat at about 2.7%....$1.8 trillion out of nearly $65 trillion in 2011.

Anonymous said...

China and India, the US EIA predicts will account for nearly half the growth in world energy use by 2035.

"Energy consumption in non-OECD Asia, led by China and India, shows the most robust growth among the non-OECD regions, rising by 91 percent from 2010 to 2035."

Riaz Haq said...

Anon: "China and India, the bUS EIA predicts will account for nearly half the growth in world energy use by 2035.

"Energy consumption in non-OECD Asia, led by China and India, shows the most robust growth among the non-OECD regions, rising by 91 percent from 2010 to 2035."

Even with 91% increase in energy consumption, India will still be about 35 million BTUs per capita (even assuming flat population--which we know it will not be), half of today's world average of 70 million BTUs per capita where China is already...OECD nations are all 200 BTUs per capita or higher.

Anonymous said...

You might want to read this
http://www.businessweek.com/articles/2012-06-28/the-rise-of-innovative-state-capitalism
A comprehensive 2009 paper by Harvard Business School looked at India’s more than 40 state-owned science and engineering research laboratories, which have used a similar type of public-private collaboration. It found that the Indian state labs had “more U.S. patents than all domestic [Indian] private firms combined.”


Hopefully one day we will read about Pakistan also the same way.

Anonymous said...

Hopefully one day we will read about Pakistan also the same way.

absolutely just get the CJ of pakistan to pass a farman and the rest will be history!

Everything from animal husbandry to space tech will be done this way.The CJ might as well call himself the new caliph!

Mayraj said...

I didn't hear any mention of Ibn Khuldun in the BBC documentary... he got his real experience in Muslim Spain! I first learned of him by reading the Muqaddimah in college.

http://en.wikipedia.org/wiki/Ibn_Khaldun
http://www.24hgold.com/english/news-gold-silver-ibn-khaldun-taxes-and-the-rise-and-decline-of-empire.aspx?contributor=Nathan+Lewis&article=2652073282G10020&redirect=False

http://www.muslimphilosophy.com/ik/klf.htm

http://www.uwplatt.edu/~soofi/khaldun2.pdf
Economics of Ibn Khaldun: Revisited

http://www.uned.es/congreso-ibn-khaldun/pdf/06%20Irfan%20Beik.pdf
Ibn Khaldun’s Contribution on Modern Economics Development:
An Analysis based on Selected Economic Issues
http://mac.abc.se/home/onesr/ez/isl/Ibn.Khaldun.Econon.html
Ibn Khaldun the father of Economics

http://www.geocities.com/ecovistainternational/articles2001/ibn_khaldun.htm
IBN KHALDUN : THE FATHER OF ECONOMICS

Riaz Haq said...

Mayraj: "I didn't hear any mention of Ibn Khuldun... he got his real experience in Muslim Spain! I first learned of him by reading the Muqaddimah in college."

It just shows that the BBC documentary is not comprehensive and the contribution of Muslim Spain is too large to even scratch the surface in a 90 min documentary.

Riaz Haq said...

Here's a WSJ story on growth challenges for China and India:

India and China are grappling with different issues. China doesn't want to repeat the mistakes—such as triggering a property bubble—that it made in its all-out response to the global financial crisis of 2009. India, meanwhile, is struggling to carry out structural economic reforms it failed to enact during its recent boom years.

China's gross domestic product has grown at an average annualized rate of 10% since 2000, but government officials know they can't sustain that torrid pace. Growth fell to 8.1% year-over-year in the first quarter, the slowest pace since 2009, and is widely expected to fall to about 7.5% in the second quarter. If the euro-zone crisis persists—or China's stimulus is poorly carried out—China's growth may weaken further.

But China is better positioned to handle a shock than it was in 2008. It relies less on trade for growth: In 2008, China's net exports amounted to 7.7% of GDP; in 2011 the share had dropped to 2.6%. Beijing reported on Monday that inflation declined to 2.2% in June, compared with a year ago. With government debt at an estimated 22% of GDP, China has plenty of levers to pull to stimulate its economy in the face of declining demand.
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"China is in a very comfortable position compared to the rest of the world," said Luis Kuijs, project director at the Fung Global Institute, a Hong Kong think tank. "It's more a matter of choice of what policy measures it will take to stimulate the economy, rather than whether it will be able to."
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"India's hands are tied, and because of that it's much more exposed to the global slowdown," said Frederic Neumann, co-head of Asian economic research for HSBC. "It has no fiscal ammo left to pump-prime the economy, so it has to endure a slowdown and take it on the chin."

India's main challenge is to stimulate business investment, which is drying up amid wariness among both domestic and foreign companies about shifting tax policies and regulations. The country's currency, the rupee, has tumbled against the dollar in the past year, partly due to growing investor concerns about India's high current-account deficit, which is roughly 4% of GDP. The rupee's fall has driven up real import costs for Indian companies and made foreign-currency loans more expensive to service.

The Reserve Bank of India in April cut interest rates for the first time in three years to fuel business lending. But when industry was looking for more last month, the central bank said it couldn't cut rates further with inflation uncomfortably high at 7.6%.

"The sad thing is that it makes sense in China for it to be slowing down, because it's maturing from a low-income to a middle-income economy," said Rob Subbaraman, Asia economist at Nomura Securities. "In India, growth should be picking up and not slowing down."


http://online.wsj.com/article/SB10001424052702304058404577496443063859250.html

Riaz Haq said...

Here's a Wharton School piece on India's low ranking on innovation index:

Just a few weeks ago, global credit rating agency Standard and Poor’s (S&P) released a study titled, “Will India be the first BRIC fallen angel?” The report suggests that India may become the first “BRIC” country (Brazil, Russia, India and China) to lose its investment grade rating. While it remains to be seen if India can escape this ignominy, the country has earned another dubious distinction: It ranks the lowest among the BRIC nations on the Global Innovation Index 2012.

This innovation index was released recently by the international business school INSEAD and the World Intellectual Property Organization (WIPO) along with the Confederation of Indian Industries (CII), Alcatel-Lucent and Booz & Co. The index ranks 141 countries on the basis of their innovation capabilities and results. Brazil, Russia and China were ranked 58th, 51st and 34th respectively. India stands at the 64th position, two notches below where the country landed last year.

According to the study, “The innovation front in India continues to be penalized by deficits in human capital and research; infrastructure and business sophistication, where it comes last among BRICs, and in knowledge and technology outputs, where it comes in ahead of Brazil only.” The report also notes that the BRIC countries need to invest further in their innovation capabilities to live up to their expected potential.

Vijay Govindarajan, a professor of international business at Dartmouth College and the first professor-in-residence and chief innovation consultant at General Electric, points out that innovation is critical to India’s future. He suggests that the government must provide seed capital to strengthen applications research and create incentives for universities, research labs and industry to collaborate. “Much is at stake if India does not move up on the Global Innovation Index,” Govindarajan says. “Without business model innovations, India cannot solve the problems for 90% of Indians. Such innovations can then be used to launch global strategies. This is the essence of reverse innovation [innovations adopted first in the developing world] — where India can lead.”

As part of the same report, India is ranked second (behind China) in the global innovation efficiency index. (The innovation efficiency index is the ratio of innovation input and innovation output.) Chandrajit Banerjee, director-general of CII notes that innovation efficiency is “a ratio and not a direct measure …. [This implies that] while India can produce innovation output best in the world when equal amounts of input are fed into its innovation ecosystem, it also needs to strengthen certain innovation drivers that will improve the situation.”

Gopichand Katragadda, managing director of General Electric’s John F. Welch Technology Center in Bangalore adds: “The results of the study point to the fact that, in India, the innovation ecosystem (input) is poor while the knowledge/creative output under the constraints is good. One interpretation of this is that we need better government measures on regulations, education and infrastructure to tap the demonstrated potential of talented people.”

According to Katragadda, if India does not get its act together on the innovation front, the country could lose the opportunity “to make this a century of Indian innovation, tapping into the brilliant technical minds of the region.”


http://knowledgetoday.wharton.upenn.edu/2012/07/india-ranks-lowest-amongst-brics-in-innovation/

Riaz Haq said...

Here's a Wall Street Journal Op Ed by Prof Walter Russell Meade on the impact of European economic crisis on geopolitics:

The crisis of the euro zone is a geopolitical as well as an economic event. While Europe may yet find a path out of its economic quagmire, it will turn inward for some time as it reorganizes some of its core institutions. The world will not stand still while this happens.

To begin with, Europe's disorder is a grand opportunity for Russia. It is not all good news in the Kremlin—Russia will hurt economically, as the European Union is its most important trading partner and customer for oil and gas. But geopolitically, Russia will have a lot of new opportunities. Ukraine, Moldova and Belarus will feel less pull from the West and more from the East.
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Elsewhere, the euro crisis has reinforced Turkey's decision to drop its long courtship of Europe and become an independent actor. Europe looks less and less to the Turks like a model to imitate and more and more like a fate to avoid. Turkey in any case would like to replace the EU as a major political and economic force in the Arab world, and it is likely to use this period of European introspection and preoccupation to advance its agenda.

Between Russia's new geopolitical opportunities and Turkey's detachment from Europe, the situation in the Balkans is going to become much more confused and perhaps even dangerous. If Greece ends up leaving the euro or is deeply embittered with Brussels and the EU over the long term, and if Cyprus is similarly affected (likely, given its close economic ties to Greece), we could see Greece and Cyprus tilt toward Russia.
------------
This is bad news for Americans. An assumption that Europe is in a period of continuing decline is to some degree baked into the cake of American foreign policy. The perception that Europe (and Japan) are no longer the powers they once were has driven the U.S. to look for new partners as it seeks to build a liberal world system in the 21st century.

But Americans expected a slow and gentle decline, with many years in which to make a gradual adjustment to the change. We hoped that the euro and the single market could mitigate or even reverse that decline. We have also taken for granted that the EU would at least be able to manage its own neighborhood, bringing peace, security and integration to the Balkans and drawing countries like Belarus, Ukraine and even Russia toward Western ways. We may now have to adjust to a world in which the EU is retreating faster and farther than anyone expected.

This euro crisis isn't just a banking or a currency issue. It is a serious political crisis that could dramatically alter the geopolitical balance in Europe and Asia.


http://online.wsj.com/article/SB10001424052702303640104577440362953611968.html

Riaz Haq said...

Here's BBC's Soutik Biswas on massive power failure in India's northern grid:

A massive power cut has caused disruption across northern India, including in the capital, Delhi.

It hit a swathe of the country affecting more than 300 million people in Punjab, Haryana, Uttar Pradesh, Himachal Pradesh and Rajasthan states.

Power Minister Sushil Kumar Shinde said most of the supply had been restored and the rest would be reinstated soon.

It is unclear why the supply collapsed but reports say some states may have been using more power than authorised.

Mr Shinde said he had appointed a committee to inquire into the causes of the blackout, one of the worst to hit the country in more than a decade. The committee will submit its report within 15 days, he said.

The power cut happened at 02:30 local time on Monday (2100 GMT Sunday) after India's Northern Grid network collapsed.
----------
Monday morning saw travel chaos engulf the region, with thousands of passengers stranded when train services were disrupted in Punjab, Haryana and Chandigarh.

The Rajdhani train from Jammu to Delhi was more than five hours late.

"The train stopped near Panipat station [in Haryana] at about 02:30. For a long time we had no idea what was holding us up," passenger DK Rajdan said.

"Rajdhani is air-conditioned so it was not uncomfortable. But for six or seven hours we couldn't get anything to eat or drink and people were beginning to get worried," he said.

Delhi Metro railway services were stalled for three hours, although the network later resumed when it received back-up power from Bhutan, one official said.

Traffic lights on the streets of the capital were not functioning as early morning commuters made their way into work, leading to gridlock.

Water treatment plants in the city also had to be shut for a few hours.

Officials said restoring services to hospitals and transport systems were a priority.

Power cuts are a common occurrence in Indian cities because of a fundamental shortage of power and an ageing grid. The chaos caused by such cuts has led to protests and unrest on the streets.

Earlier in July, crowds in the Delhi suburb of Gurgaon blocked traffic and clashed with police after blackouts there.

Correspondents say that India urgently needs a huge increase in power production, as hundreds of millions of its people are not even connected to the national grid.

Prime Minister Manmohan Singh has long said that India must look to nuclear energy to supply power to the people.

Estimates say that nuclear energy contributes only 3% to the country's current power supply. But the construction of some proposed nuclear power stations have been stalled by intense local opposition.


http://www.bbc.co.uk/news/world-asia-india-19043972

Riaz Haq said...

Here's BBC's Soutik Biswas on India's power situation:

As India copes with a massive power breakdown for a second successive day, some interesting facts about the country's power situation to chew on:

India has an installed capacity of more than 170,000 megawatts, up from a mere 1,362 megawatts at the time of Independence in 1947

The majority (around 60%) is generated from coal and lignite, while just under a quarter (about 22%) is hydro-electric

Despite its soaring energy needs, India has one of the lowest per capita rates of consumption of power in the world - 734 units as compared to a world average of 2,429 units. This is nothing compared with say, Canada, (18,347 units) and the US (13,647 units). China's per capita consumption (2,456 units) is more than three times that of India.

The low per capita consumption is despite the fact that the power sector has been growing at more than 7% every year.
Homes and farms are consuming more power today than industries and businesses. Industrial consumption has actually dropped from 61.6% in 1970-71 to 38% in 2008-2009.

India has suffered consistent power shortages since Independence in 1947. Peak demand shortage is more than 10%, whereas the overall energy shortage is more than 7%.

Sixty-five years after Independence, only nine states - Andhra Pradesh, Gujarat, Karnataka, Goa, Delhi, Haryana, Kerala, Punjab and Tamil Nadu - of 28 have been officially declared totally electrified.

India remains perennially energy starved despite 15% or more of federal funds being allocated to the power sector. Bankrupt state-run electricity boards, an acute shortage of coal, skewed subsidises which end up benefiting rich farmers, power theft, and under-performing private distribution agencies are to blame, say experts. There is no shortage of money, and the problem, as the Planning Commission admits, is more "in the delivery process [than] in the system".

Transmission and distribution losses have leapt from 22% in 1995-96 to about 25.6% in 2009-2010. The states with the worst losses are Indian-administered Kashmir, Bihar, Chhattisgarh, Jharkhand and Madhya Pradesh. The best performers: Punjab, Himachal Pradesh, Andhra Pradesh and Tamil Nadu.

India's first power generation company was the private Calcutta Electric Supply Corporation (CESC) started in 1899. The first diesel power plant was set up in Delhi in 1905. The first hydro-electric power station was set up in Mysore in 1902. At the time of Independence, about 60% of India's power sector was privately owned. Today, about 80% of the installed capacity is in the hands of the government. Private companies own 12% of the capacity.


http://www.bbc.co.uk/news/world-asia-india-19063241

Riaz Haq said...

Here's an NDTV story on foreign investor disenchantment with India:

India's economy is growing at its slowest pace in nearly a decade, with stubborn inflationary pressures and high interest rates.



But what global firms often find hardest is the red tape and the policy paralysis that has stalled major reforms.


"Doing business in India is difficult because the problem is there are too many decision makers," Amit Midha, president of Asia Pacific and Japan for Dell, told Reuters in an interview.


"And decision makers change quite often. New decision makers come and they don't honour the contract previously signed."


Irked by a lack of opportunities, Germany's Fraport - the world's second-biggest airport operator - recently decided to shut its development office in India, becoming the latest in a growing list of companies exiting Asia's third-largest economy.


"When a company is trying to leave India and that company is well respected, then clearly it suggests that there is something, this place is not easy to work," Midha said.


UNCERTAIN TAXES, TOUGH GESTATION


A lack of clarity in recent proposals aimed at targeting tax evasion, including retrospective taxation on foreign corporate deals involving Indian assets, panicked foreign investors. Those rules have now been put on hold.


"Policies like retroactive taxes...are a huge risk for us to make an investment. We just do not know how to assess our results and how to report our results globally," said Shanghai-based Midha during a visit toNew Delhi.


"That sort of a set-up doesn't work for any global company for that matter."


Dell has operations in eight cities in India, where it has had a presence since 1996.


With 27,000 employees, India is Dell's biggest employee base outside the United States.



Chief Executive Officer Michael Dell told Reuters in July that Dell is bullish on India, along with China andBrazil.


Dell's experience in India has helped it deal better with the complications of doing business in a high-growth, but poor-infrastructure market, Midha said.


"From our experience, we tell people, in India, the initial gestation period can be hard, but once it's over, it can be a lot smoother," said Midha, who is also the chairman of Global Emerging Markets for Dell.


"If you don't have the resources, don't get into it. Because you need to make sure you have some staying power to go through the initial gestation period."


Midha said Dell had no plans to leave India and is now familiar with how to "navigate" in the country.


"There is a lot of progress made here in terms of infrastructure, but things like blackouts and other things doesn't give India a good position in the global stage," he said.


Hundreds of millions of Indians were left without power earlier this month in one of the world's worst blackouts when electricity grids collapsed two days in a row.


"I think the government is committed to promote investments in India, I see lots of signs of that," Midha said. "But, that said, proof is in the pudding."


http://profit.ndtv.com/News/Article/dell-takes-swipe-at-indian-way-of-doing-business-309520?pfrom=home-lateststories

Riaz Haq said...

Here's a Washington Post piece on India's thirst for energy:

Like China two decades ago and the United States in 1950, India stands on the cusp of transformational economic and social change, a jumping-off point at which the demand for electricity is about to explode.

Its economy and population are among the fastest growing in the world, and it has ambitious and energy-intensive plans to develop its infrastructure and industrial base. But business leaders are crying out for uninterrupted power supplies, and a third of India’s population is not even connected to the national grid.
-----------
Every modern, industrial society in history has gone through a 20-year period “where there was extremely large investment in the power sector, and electricity made the transition from a privilege of an urban elite to something every family would have,” Varro said. “India is right now just at that jump point.”

Whether it succeeds in meeting that demand could be the single most important determinant of India’s economic prospects over the next two decades, one of the main factors that will decide whether the country can continue to pull hundreds of millions of people out of poverty and realize its ambitions to be a 21st-century economic powerhouse.
-----------
But even if India finds the fuel it needs to power its generators, it is not clear how it will pay for the electricity they produce.

State electricity distribution companies across India are mostly bankrupt, forced by their political masters to give power away — free to farmers to run water pumps to irrigate their land, and at below-cost prices to everyone else. Theft and losses of power amount to 28 to 30 percent of output, further bleeding the distributors of resources.

Nationally, separate ministries for coal, gas, power and renewable energy routinely fail to coordinate.

“Policymaking in the energy sector is rather fragmented, and we really don’t have a forward vision,” said Rajendra Pachauri, who won the Nobel Prize in 2007 for his work as head of the Intergovernmental Panel on Climate Change.

Pachauri forecasts that if India continues on its path of “business as usual,” it will have to import unimaginable, and unfeasible, amounts of coal and oil in two decades.

A failure to invest properly in researching and developing renewable energy also threatens environmental ruin. “India can’t possibly continue on the path we are on,” he said.

Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution in Washington, said the difficulties that India faces in meeting its rising energy demand “would pose a serious political challenge for a well-run government — and that certainly isn’t the case here.”

He said the country could struggle to hold its own against other emerging economies, including Brazil, Russia, China and South Africa, countries that with India constitute what is known as the BRICS group.

“If I had to bet, I would say there is a greater possibility of India failing to meet the challenge than of meeting it,” Ebinger said. “You will see India slip down, out of the ranks of the fast-growing BRICS emerging markets, and you will see more political disturbances when energy fails.”


http://www.washingtonpost.com/world/asia_pacific/satisfying-indias-thirst-for-power-could-be-nations-biggest-challenge/2012/08/22/65f6c6d2-e21c-11e1-98e7-89d659f9c106_story_1.html

HopeWins Junior said...

Power Shift?

You want the Power Shift?

You think you can handle the Power Shift?

Here is the Power Shift:

http://3.bp.blogspot.com/-oERTAr-tYwU/UFU07Eg9eNI/AAAAAAAAAc0/bl4gzAQrsXU/s1600/ScreenHunter_135+Sep.+15+22.09.jpg

Riaz Haq said...

Here's a TOI story of dearth of research in India:

NEW DELHI: At a time when India is being looked at as the next big knowledge superpower, this could come as a shocker. Just 3.5% of global research output in 2010 was actually from India. In most disciplines, India's share in global research output was actually much below this overall average count.

Sample this - India's share of world research output in clinical medicine was a meagre 1.9% in 2010, 0.5% in psychiatry, 1.4% in neurosciences, 1.8% in immunology, 2.1% in molecular biology and just 3.5% in environmental research.

In mathematics, India's share of world output stood at around 2% in 2010 while it was 17% for China. In case of materials sciences, India's share of world research stood at 6.4% in 2010 while China's stood at 26% -- a rise from 5% in 1996.

While India's research on physics stood at 4.6% in 2010, China's stood at 19%.

In 2010, India's largest shares of world research output were in chemistry (6.5%), materials science (6.4%), agricultural sciences (6.2%), pharmacology and toxicology (6.1%), microbiology (4.9%), physics (4.6%) and engineering (4.2%).

India is often referred to as the next big place for computer sciences. But the figures on its research is abysmally low. Only 2.4% of global research on computer sciences was from India in 2010 while the world share moved to three emerging research economies - China 15%, Korea 6.3% and Taiwan 5.7%.

India's global share of research in economics stood at 0.7% in 2010 while in social sciences it was worse - 0.6%.

The biggest declines in volume of research between 1981 and 2010 were in plant and animal sciences (-2.2%) and agricultural sciences (-1.6%). The most significant expansions were in pharmacology and toxicology (+4.2%), microbiology (+3.2%) and materials sciences (+3.1%).

These are the findings of the study on India's research output and collaboration conducted by Thomson Reuters and recently submitted to the department of science and technology.

"India has been the sleeping giant of Asia. Research in the university sector, stagnant for at least two decades, is now accelerating but it will be a long haul to restore India as an Asian knowledge hub. Indian higher education is faced with powerful dilemmas and difficult choices - public/private, access/equity, uncertain regulation, different teaching standards and contested research quality," the report said.

According to it, India's share of world output in engineering fell from 4.3% in 1981 to 2.2% by 1995. India later regained its lost share, increasing to 4.25 by 2010. However, even then, India was overtaken by China (16.4%), Korea (5.4%) and Taiwan (4.4%).

India, where agriculture dominates economic standards, had quite a large share in agricultural sciences which averaged 7.45% over the 1981 to 1995 period, well ahead of other emerging research economies. Its share, however, fell to 6.2% in 2010. Even in the field of plant and animal sciences, the global research output fell from 6.1% in 1981 to 3.9% in 2010.

The report said, "India has a long and distinguished history as a country of knowledge, learning and innovation. In the recent past, however, it has failed to realize its undoubted potential as a home for world class research."

It added, "During the 1980s and 90s, the output of India's research was almost static while other countries grew rapidly, particularly in Asia. China expanded with an intensity and drive that led it rapidly to overtake leading European countries in the volume of its research publications. India is just beginning on this gradient."


http://timesofindia.indiatimes.com/india/India-accounts-for-just-3-5-of-global-research-output-Study/articleshow/16551045.cms

Riaz Haq said...

Here's PakistanToday on primary energy consumption in Pakistan:

KARACHI - Pakistan’s gas requirements are growing hastily, while the domestic gas production is not growing at the same pace. Primary energy consumption in Pakistan has grown by almost 80pc over the past 15 years, from 34 million tons oil equivalent (TOEs) in 1994/95 to 60 million TOEs in 2010/11 and has supported an average GDP growth rate in the country of about 4.5pc per annum.

Consumer Rights Commission of Pakistan (CRCP) in collaboration with Citizens’ Voice Project hold policy dialogues on “Role of Government and Regulators in the Gas Sector of Pakistan” with parliamentarians, policy makers, regulators and civil society organisations here on Wednesday.

CRCP recommended Effective Governance & Regulation for development of Gas Policy in dialogue.

The present natural Gas crisis clearly indicates that overall governance of the gas sector needs improvement. The growing energy shortages have made life difficult for Pakistanis across the board. The quality of life of citizens has deteriorated.

Dialogue reported that economic growth rates have been stunted, and industry and agriculture have suffered. The Government of Pakistan has not yet recognising magnitude of crisis and its effect on the people and the economy. Government has to take emergency measures to address, manage and reduce the impact of crisis. The reasons for present crisis in gas sector have both technical and governance aspects.

The dialogues have given comprehensive insight into the current situation of transparency, public participation and accountability processes in gas sector of Pakistan. The intervention is likely to result in enhanced understanding of the sect oral issues for the stakeholders.

Most important of all, it is expected to inform the policy makers and especially the public representatives about the governance situation of the sector and shall persuade them to take positive actions for sectoral improvement. In Pakistan, industrial and fertilizer sectors are getting gas on subsidised rates, while the CNG stations were being subjected to an exorbitantly high tariff regime, neglecting the general public’s interest. The gas consumers’ woes could not be resolved unless Pakistan had an autonomous regulator free of political interference. Besides, the problems could not be resolved without improving people’s access to information, putting in place a system of strict penalties on consumers involved in gas pilferage and non-payment of gas bills


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/31-Jan-2013/primary-energy-consumption-grows-by-almost-80pc-in-15-years

Riaz Haq said...

Here's a Daily Times report on AI and Robotics education in Pakistan:

ISLAMABAD: Robotics as a discipline of science and technology is being taught at the graduate and post-graduate levels by more than 60 universities of Engineering Science and Technology in Pakistan, official sources told Daily Times here on Saturday.

The research and development (R&D) in advanced fields of Robotics and Artificial Intelligence has also been undertaken by some of laboratories established in the R&D institutes and universities in Pakistan. The official in the Ministry of Science and Technology claimed that there is a technical group engaged in development of automation of industrial processes at the National Institute of Electronics (NIE), Islamabad. The group has developed Programmable Logic Controllers (PLCs), which are used in automatic industrial controls.

The Centre for Intelligent Machines and Robotics (IMR) at the COMSATS Institute of Information Technology has a Research Group, which is undertaking research related to robotics, computer vision and machine learning. The IMR Research Group is conducting basic and applied research in robotics technologies relevant to industrial and societal tasks; the robotics technology in Pakistan has the potential role in boosting the productivity and competitiveness. The researchers at CIIT are working for projects on visual guided robotic systems for use in surgery, navigation control, mapping and geometric representation of environmental parameters.

National Engineering Robotics Contest (NERC) is an inter universities robotics competition held annually since 2005 at the NUST. The contest is organised by HEC, the Science, Technology, Engineering and Mathematics (STEM) Careers Project with more than 60 Pakistani universities participating in the event, and aims to train individuals for engineering services in Pakistan, and cash prizes are awarded to the winners.

NERC 2011 held at the College of Electrical and Mechanical Engineering (EME), Rawalpindi from June 28 to July 2. Many universities like FAST, GIKI, LUMS, CASE and UET Lahore participated in the event, where students were encouraged to design, develop and programme their respective robots.

R&D projects on Tele-Surgical Training Robot and Simulators and Development of Intelligent Robotic Wheelchairs are being undertaken by NUST funded by ICT R&D Fund.

International workshops and seminars for knowledge sharing and events at national level for talent hunt among youth in the fields of robotics have been organised regularly at NUST. Specialisation in robotics is a popular choice for students going abroad to study under various scholarships schemes for research and PhD. This field offers job opportunities, and robotics engineers can apply their mastery in diverse fields like modern warfare, surgery, nano-technology and space-exploration.

The official claimed that developing a robot comes with the goal of finding a solution to the problem. Along with the technical know-how, interest in research is essential. This field has promising opportunities, with no boundaries and will continue to grow with the advancement of science and technology in the near future.


http://www.dailytimes.com.pk/default.asp?page=2013\02\10\story_10-2-2013_pg5_12

Riaz Haq said...

Here's a Dawn story on Saudi help for incoming Prime Minister Nawaz Sharif to overcome energy crisis in Pakistan:

ISLAMABAD, May 22: With an ‘amiable’ government in place, Saudi Arabia is expected to extend a bailout package of about $15 billion to Pakistan’s highly indebted energy sector by supplying crude and furnace oil on deferred payment to enable it to resolve the chronic circular debt issue.

A senior government official said the Saudis had been taking reasonable interest in helping out the incoming PML-N government led by Nawaz Sharif.

They had extended a similar special package to Pakistan soon after it went nuclear in 1998 and faced international economic sanctions.

Between 1998 and 2002, Pakistan received $3.5 billion (Rs190 billion at the exchange rate at that time) worth of oil from Saudi Arabia on deferred payment, a major part of which was converted into grant.

According to the official, as soon as the PML-N emerged as the majority party after the May 11 elections, the Saudi ambassador in Islamabad sought a briefing on the country’s oil requirements from the foreign ministry before calling on prime minister-designate Nawaz Sharif in Raiwind, Lahore.

He was immediately provided a position paper, the official said.

Pakistan expects about 100,000 barrels of crude oil and about 15,000 tons of furnace oil per day from Saudi Arabia on deferred payment for three years. The amount involved works out at about $12-15bn.

The facility can be utilised to reduce loadshedding in the short term and provide an opportunity in the medium term to restructure the power sector by minimising subsidies, eliminating circular debt, ensuring recovery from the public sector and reducing system losses to bring it to a self-sustainable level.

“During the package period, the PML-N government can resolve the electricity crisis and develop hydropower projects through a combination of public and private investments and bagasse-based power production by the sugar industry,” he said.

He said the arrangement for oil supplies on deferred payments could be further discussed during Mr Sharif’s first visit to Saudi Arabia soon after assuming the office of prime minister early next month.

Pakistan’s total crude oil import is about 400,000 barrels per day and 30,000 tons of furnace oil. Its total oil import bill stands at about $15bn per annum.

The official said a request for 100,000 barrels of oil and 15,000 tons per day of furnace oil had already been passed on through the Pakistan-Saudi Arabia Joint Ministerial Commission.

A meeting of the commission could be convened soon after the new government assumed charge, an official said.

The Saudi rulers had not taken any interest in the issue earlier ostensibly because of the chill in their relationship with the PPP government.

Large political delegations taken to Saudi Arabia by the PPP government were cold-shouldered, an official said, adding that warming up of diplomatic relations with Iran and the UAE and cancellation of hunting facilities for Saudi royals had also annoyed the kingdom.

The official said the breathing space provided by the likely Saudi package could also be used for renegotiating gas price with Iran for the Iran-Pakistan gas pipeline to bring it down to a sustainable level.

Under the gas sales and purchase price agreement, any party may seek revision of the rates in view of the cost of alternative import options one year ahead of the first gas flows scheduled to take place in December 2014.

The official ruled out any possibility that the Saudi oil package could be used to persuade Pakistan to stay away from the Iranian gas import. He said the project had reached an advanced stage and involved international agreements and, therefore, backtracking was no option, but the development could give leverage to Pakistan to secure lower gas prices.


http://beta.dawn.com/news/1013070/15-billion-saudi-bailout-likely/

Riaz Haq said...

It is true of course true that Trinity College's 32 Nobel Prizes are more than the 10 awarded to Muslims. But what makes this an "intriguing fact" to Dawkins? The fact that Muslim majority societies have been generally poorer than Western ones for centuries is well understood.

When the Nobel Prize was founded in 1901, the vast majority of the world's Muslims lived in countries ruled by foreign powers, and for much of the 20th century Muslims did not have much access to great centers of learning like Cambridge. The ranks of Nobel prize winners have traditionally been dominated by white, Western men – a reflection of both the economic might of the West in the past century, preferential access to education for that class of people and also, it must be added, a wonderful intellectual tradition. But one might as well be intrigued by the fact that Africans have fewer Nobels than Trinity (nine) or that Indians do (four) or that Chinese do (eight). Or perhaps Dawkins is "intrigued" that women have only won 44 Nobel Prizes, compared with 791 for men?

http://www.csmonitor.com/World/Backchannels/2013/0809/Finally-something-that-Mike-Huckabee-and-Richard-Dawkins-can-agree-upon

Riaz Haq said...

Atheist Richard Dawkins has recently disparaged Muslims by pointing out that the entire Muslim world has had fewer Nobels (10) than Cambridge's Trinity College (34). While Dawkins is correct in that assertion, it;s important to recognize that the history of humanity is not just 100 years old. It did not begin with the launch of Nobels in 1901. It stretches much further back. The defining work of Muslims in earlier centuries included development of decimal number system (still called Arabic numerals), Algebra, the idea of algorithms, first camera, fountain pen, etc. In "Lost Discoveries" by Dick Teresi, the author says, "Clearly, the Arabs served as a conduit, but the math laid on the doorstep of Renaissance Europe cannot be attributed solely to ancient Greece. It incorporates the accomplishments of Sumer, Babylonia, Egypt, India, China and the far reaches of the Medieval Islamic world." Teresi by his description of the work done by Copernicus. Nasir al-Din al-Tusi, a Persian Muslim astronomer and mathematician, developed at least one of Copernicus's theorems, now called The Tusi Couple, three hundred years before Copernicus. Copernicus used the theorem without offering any proof or giving credit to al-Tusi. This was pointed out by Kepler, who looked at Copernicus's work before he developed his own elliptical orbits idea.

A second theorem found in Copernican system, called Urdi lemma, was developed by another Muslim scientist Mu'ayyad al-Din al-Urdi, in 1250. Again, Copernicus neither offered proof nor gave credit to al-Urdi. Columbia University's George Saliba believes Copernicus didn't credit him because Muslims were not popular in 16th century Europe, not unlike the situation today. http://www.riazhaq.com/2009/06/obama-islam-and-science.html

Riaz Haq said...

Combined PPP GDP of poor developing countries exceeds combined GDP of rich industrialized countries, according to a report in Huffington Post:

For the first time ever, the combined gross domestic product of emerging and developing markets, adjusted for purchasing price parity, has eclipsed the combined measure of advanced economies. Purchasing price parity—or PPP for short—adjusts for the relative cost of comparable goods in different economic markets.

According to the International Monetary Fund—the supplier of this data—emerging and developing economies will have a purchasing price parity-adjusted GDP of $42.8 trillion in 2013, while that of emerging economies will be $44.4 trillion. In other words, emerging markets will create $1.6 trillion more value in goods and services than advanced markets this year.

Advanced economies are, according to the IMF, the 34 nations that result from combining the members of the G7, euro area countries, and the 4 “newly industrialized Asian economies”—Taiwan, Hong Kong, Singapore, and South Korea. The world’s 150 other nations are considered emerging or developing.

Excluding the largest advanced economy, the United Sates, and the largest emerging economy, China, which both account from more than 30% of their respective group’s total GDP, the data show that the PPP-adjusted GDP of poorer nations surpassed that of richer ones in 2009.

It’s worth keeping in mind that the emerging economies have strength in numbers. Not only are there more emerging and developing nations; those nations also boast a larger combined population.

As such, emerging and developing economies trail far behind advanced economies in per-capita terms. Their aggregate per-capita PPP-adjusted GDP is $7,415, while the same measure for advanced nations totals $41,369.


http://www.huffingtonpost.com/2013/08/28/gdp-poor-countries_n_3830396.html

Riaz Haq said...

Here's NY Times Nobel Laureate economist-columnist on Ibn Khaldun's lessons for Microsoft and other established powers:

The trouble for Microsoft came with the rise of new devices whose importance it famously failed to grasp. “There’s no chance,” declared Mr. Ballmer in 2007, “that the iPhone is going to get any significant market share.”

How could Microsoft have been so blind? Here’s where Ibn Khaldun comes in. He was a 14th-century Islamic philosopher who basically invented what we would now call the social sciences. And one insight he had, based on the history of his native North Africa, was that there was a rhythm to the rise and fall of dynasties.

Desert tribesmen, he argued, always have more courage and social cohesion than settled, civilized folk, so every once in a while they will sweep in and conquer lands whose rulers have become corrupt and complacent. They create a new dynasty — and, over time, become corrupt and complacent themselves, ready to be overrun by a new set of barbarians.

I don’t think it’s much of a stretch to apply this story to Microsoft, a company that did so well with its operating-system monopoly that it lost focus, while Apple — still wandering in the wilderness after all those years — was alert to new opportunities. And so the barbarians swept in from the desert.

Sometimes, by the way, barbarians are invited in by a domestic faction seeking a shake-up. This may be what’s happening at Yahoo: Marissa Mayer doesn’t look much like a fierce Bedouin chieftain, but she’s arguably filling the same functional role.

Anyway, the funny thing is that Apple’s position in mobile devices now bears a strong resemblance to Microsoft’s former position in operating systems. True, Apple produces high-quality products. But they are, by most accounts, little if any better than those of rivals, while selling at premium prices.

So why do people buy them? Network externalities: lots of other people use iWhatevers, there are more apps for iOS than for other systems, so Apple becomes the safe and easy choice. Meet the new boss, same as the old boss.

Is there a policy moral here? Let me make at least a negative case: Even though Microsoft did not, in fact, end up taking over the world, those antitrust concerns weren’t misplaced. Microsoft was a monopolist, it did extract a lot of monopoly rents, and it did inhibit innovation. Creative destruction means that monopolies aren’t forever, but it doesn’t mean that they’re harmless while they last. This was true for Microsoft yesterday; it may be true for Apple, or Google, or someone not yet on our radar, tomorrow.


http://www.nytimes.com/2013/08/26/opinion/krugman-the-decline-of-e-empires.html

Riaz Haq said...

Why is the English laguage so dominant and widely used today? It's because language does not exist or grow in vacuum. As a means of communication, it reflects the state of the people whose language it is. The global ascendance of the English language has coincided with the rise of the Anglo-Saxon people beginning with the Industrial Revolution in 18th century England. It marked a dramatic shift of global power from East to West.

http://www.riazhaq.com/2012/07/global-power-shift-since-industrial.html

Riaz Haq said...

Here's an excerpt of The Economist magazine story on productivity gap between US and developing nations:

The productivity gap, an indicator of a country’s output capabilities, is the ratio between the productivity of a benchmark country (such as the United States) and that of a less developed economy. The latest Latin America Outlook from the OECD, a think-tank, compared the productivity gaps of selected countries in the region with those of economies in Asia. In general, productivity gaps in Asian countries have narrowed significantly over the past three decades. America’s productivity in 1980 was 125 times that of China; by 2011 the gulf had come down to 17 times. In Latin America and the Caribbean, however, not only was there a much smaller reduction, in many cases the gap had grown.

http://www.economist.com/news/economic-and-financial-indicators/21588391-productivity-gaps?fsrc=scn/tw/te/pe/productivitygap

Riaz Haq said...

Here's a Huffington Post review of a book about second Industrial Revolution:

Andrew McAfee and Erik Brynjolfsson, from MIT's Center for Digital Business, have a new book out this week called, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies.
--------
That's why we invited McAfee to join EMC's leadership team in Boston a couple of weeks ago to talk with us about how every business model in every industry is going to be redefined in some form by software. If the first machine age was about the automation of manual labor and horsepower, the second machine age is about the automation of knowledge work, thanks to the proliferation of real time, predictive data analytics, machine learning and the Internet of Things -- an estimated 200 billion devices connected to the Internet by 2020, all of them generating unimaginable quantities of data.

McAfee and Brynjolfsson's favorite example of automated work is Google's self-driving car, a marvel of ingenuity enabled by technology's ability to capture the data of so many moving variables and act on them instantly, free of human error. If a self-driving car seems far-fetched, how about software that grades students' essays more objectively, consistently and quickly than humans? Or news articles on Forbes.com about corporate earnings previews -- "all generated by algorithms without human involvement."

We used to speak about how organizations had access to databases. Now, leading organizations are building "data lakes" -- giant reservoirs of information in heterogeneous formats, to aid decision-making and to offer new services to customers. Mobile apps collect intelligence from vast networks of drivers on highways to direct us to the least congested routes between points A and B. "Massive online open courses" offer thousands of college level students access to the best lecturers halfway around the world -- at a fraction of the cost.

But progress always has a flip side -- and its critics. Sweeping technology-driven transformations are as much about disruption and dislocation as opportunity. To explore this trade-off, we at EMC are hosting a breakfast conversation in Davos on Thursday with McAfee, Brynjolfsson and New York Times columnist Tom Friedman, who has written about these topics in previous books and columns. No conversation about the future can ignore the human costs of progress or the discomforting question of whether everyone is adequately prepared.

On this question, McAfee and Brynjolfsson are generally optimistic about the future of technology and the opportunities for humanity. The good news is, living standards increase with gains in productivity. But why are so many innovative large companies awash in cash while unemployment rates have hardly budged?

Harvard Business School's Clayton Christensen, who has devoted a career to studying disruptive innovation, spoke with us about this recently. The challenge, he notes, is that so much of the innovation we see in the world today is efficiency-based in nature: it's about doing familiar things in cheaper, more efficient ways.

In The Second Machine Age, the great software-defined businesses of tomorrow will be the ones that usher in breakthrough innovations that do new things entirely -- the kind of innovation that generates new value by opening up unforeseen market opportunities: new products, new services, new ways of servicing customers, and new jobs. That's what the first machine age was all about. Ready or not, the second machine age is already underway. And the value and disruption it will generate will stagger us all.


http://www.huffingtonpost.com/bill-teuber/the-coming-of-the-second-machine-age_b_4648207.html

Riaz Haq said...

Here's a Mint story on British economist Angus Maddison estimates of India's historic per cap GDP:

Was India a wealthy country before the British came? The numbers that have garnered the most attention have been his GDP estimates, because they fit in with the narrative of a strong India and China getting back their clout in the world economy. But what is that to the average Indian or Chinese citizen? What if the only reason these countries had such a high GDP in earlier times was because they had a larger population?
That is what is brought out by Maddison’s estimates of GDP per capita, again in PPP terms in 1990 dollars. In 1 AD, India’s GDP per capita was $450, as was China’s. But Italy under the Roman Empire had a per capita income of $809. In 1000 AD, India’s per capita income was $450 and China’s $466. But the average of the West Asian countries, such as Turkey and Iraq, was much higher at $621. In terms of general prosperity, therefore, it was the Arab world that was doing well a millennium ago. The Caliphate in Baghdad was a centre of power at the time and both science and culture flourished.
By 1500, though, new centres of prosperity had emerged. India’s per capita income was $550 and China’s $600 in 1500. The Arab world had declined. But standards of living in Western Europe at that time had already gone far ahead. Italy topped the table, with a per capita income of $1,100, the Netherlands following with a per capita income of $761. This was the Italy of the Renaissance, the Italy of Michelangelo and Leonardo da Vinci, of Raphael and Titian. The UK was not far behind, with a per capita income of $714.
By 1600, the centre of Europe had shifted northwards and the golden age of Holland had begun. Dutch per capita income was $1,381 in 1600, while Britain in Shakespeare’s time had a per capita income of $974.
Recall that 1600 was the year the East India Company was founded. In contrast, India’s per capita income continued to be $550, while China’s was $600. Note that even Ireland, one of the poorest of Western Europe’s countries, had a per capita income of $615, higher than India’s and China’s. In short, the per capita GDP numbers mirror the changes in power, prosperity and cultural and scientific achievement.
It wasn’t till 1981 that India had a per capita income of $977, beating that of Britain in 1600. And it wasn’t until 1993 that India’s per capita income of $1,399 surpassed what the Dutch had achieved in 1600. Maddison’s calculations show that in 2008, India’s per capita GDP ( in 1990 dollars, PPP terms) was $2,975, slightly more than one-third of the world average of $7,614. We have a long way to go.


http://www.livemint.com/Opinion/Nb7KkZ3yOVSNW3vHf9K1oM/World-history-by-per-capita-GDP.html

Riaz Haq said...

One can probably get a good historic overview of India's economic and social indicators data by reading British economist Angus Maddison and Swedish statistician Hans Rosling.

Maddison estimates that in PPP terms in 1990 dollars. In 1 AD, India’s GDP per capita was $450, as was China’s. But Italy under the Roman Empire had a per capita income of $809. In 1000 AD, India’s per capita income was $450 and China’s $466. But the average of the West Asian countries, such as Turkey and Iraq, was much higher at $621. In terms of general prosperity, therefore, it was the Arab world that was doing well a millennium ago. The Caliphate in Baghdad was a centre of power at the time and both science and culture flourished.

http://www.livemint.com/Opinion/Nb7KkZ3yOVSNW3vHf9K1oM/World-history-by-per-capita-GDP.html

Rosling (www.gapminder.org) has estimated India's life expectancy in 1800 at about 23 years, lower than its peers at the time.