The New Nation - Internet Edition

People want price control

THE government is doing many good things. However, there are issues no less important from the people's point of view that require also zestful efforts of the administration. Stabilisation of prices is one such very major issue. If a survey is conducted, it will very possibly show that the anti-corruption drive of the governments to set the stage for holding of free and fair elections, enjoy, broad-based support among the people. But it could also indicate that people's expectations remain unmet in respect of a very pressing demand which is, that they should be spared the sufferings from relentless price rises of essential commodities.

Like the improvement of conditions in many areas of public life, it was also thought that favourable changes would sweep the markets and the people would be getting the benefits of reasonable prices of essential goods or at least a pause in the upward movement of prices. But this has not happened and prices of kitchen items that affect the life and living of common people have been increasing without a pause. The prices are also increasing unjustifiably and explanations that the rising prices are due to similar rise in their prices in international markets, is also proving inadequate.

It appears from the comments of the Advisers that the government realises these highly undesirable realities in the market and the volatile mood of the suffering consumers facing hardships. But what is desperately needed is an immediate befitting response to the same. Consumers of modest means, and they are the majority, are feeling massively let down from the unabated price rise. However, the very disgruntled mood of the consumers may mellow down over the medium and long terms provided the government plays its cards with more skill and acumen from now on to check the runaway price rises.

Soaring gold price

DUE to continuous soaring of gold price at local and international markets in recent years, Bangladesh's gold traders, mainly smaller ones, are facing problems as their sales have fallen drastically. Jewellery shops in cities and elsewhere in the country largely depend on the middle and low-income groups of customers for their sales. The groups of people usually buy gold ornaments on rare occasions now as the price of the precious metal has gone beyond their reach. Small gold traders in the city say, the fall, on an average, in the sales is about 60 per cent.

One gold trader in the city was quoted to have said he could sell gold ornaments worth Tk 10,000 to 15,000 per day two years back but now sales have come down to a bare minimum level. The customers who used to buy small gold ornaments as gift items on various occasions have switched over to electronic appliances, gift vouchers and prize bonds. According to reports, gold price hit Tk. 26,300 per 'bhori' (11.66 grams) at the city markets after increase twice in past two months. The association, however, put logic that the gold price was increased 'to adjust' with the international market rate.

Many small gold traders are reportedly now selling ornaments made of 'silver and imitation' jewelleries at their shops as a large segment of the regular customers are going for them because of unusual higher price of gold. One of the biggest jewellery markets in the capital, Chandni Chawk near the New Market, had a few silver jewellery shops a year before. But now there are now a number of silver jewellery shops there. Many traditional goldsmiths in the old part of the city and elsewhere in the country are changing their profession mainly due to hardship caused by higher price of gold and shrinking of the ornament market.

Stop misrepresenting facts in textbooks

M.T. Hussain

The changes and modification brought about in some places to make an icon of a person in particular school textbook contents effective from the school academic year 2008 have logically and reasonably called into question the political party neutrality of the Caretaker Government (CG) of Bangladesh now led by Dr Fakhruddin Ahmad. The changes have further created controversy if the CG had not overstepped beyond constitutional jurisdiction (58D-1), as well, for taking recourse to facts having no substance with reality at all. One must wonder, in addition, if the changes and modification brought about by the CG would be retained during the administration of the next elected government of either persuasion that is likely to take on in a matter of months by the end of year 2008.

It is not untrue that in the last decades following Independence of Bangladesh in 1971, there had been no changes in contents in textbooks as the one made recently but done one after another in turn with changes of government of opposite persuasions. All such changes were, however, done not in any case by the CG but by the political party governments. In fact, in modern democratic newly independent states, such changes are not unusual for government in power more often than not seeks in the process to project their own image and specifically for particular leader/s of the ruling party. Thus, we had changes to project one or the other in turn of events and in changed political scenario in the past decades.

Educational curricula by its inherent own demand for updating need may be changed and modified from time to time for inclusion of relevant authentic facts of knowledge. Unfortunately, the changes made in 2008 have no factual basis for events of 1971. The events of 1971 are not factually well known to the new progeny as those are in memory of all like me had been conscious onlookers and painful sufferers, as well.

The month of March 1971 until the 25th had not only been uncertainly agonising but extremely fearful too in near anarchic situation that took still another vicious form from about the midnight of the 25th for we lived in the capital city of Dhaka with family members and young children.

Since the first day of March when the newly elected National Assembly session scheduled to sit in Dhaka was suddenly postponed, we began to experience anarchy all over the city. Agitating students of the Dhaka University took the lead ahead of the politicians, even ahead of the leader of the majority party elected leader so much so that they declared Independence of Bangladesh through raising the proposed flag of the country on the 3rd March.

In this backdrop when the leader announced the programme of his public meeting at the then Ramna Race Course for the 7th March, many people including myself expected that he would make the Unilateral Declaration of Independence (UDI). But the lakhs of people who attended the public meeting including myself wondered that the leader did not make the UDI.

Then went on continuing agonising moments and days between 15th March to the 25th, people expecting arriving at compromising formula between the President of Pakistan and the East Pakistan majority party elected leader for power transfer to the elected representatives of the people, but all appeared to come to vain on the night of the 25th March midnight in fearful scenario of firing and shells overflying as I saw in case of my four-storey government quarters located at the Tejgaon Industrial Area along with announcement of curfew imposed in the Dhaka city that continued the next day without any interruption.

Later on we knew that the leader did ask his close comrades who stayed until about 10 or 11 that 25th March night to enforce the 27th March Hartal, and immediately afterwards he himself surrendered like a good guy without the slightest resistance, much less went on hiding, to the federal army men who took him away from his home at the Dhanmondi Road No. 32 (Old). Had he made the UDI, he would have either go underground or went away to lead the impending war. Curiously enough before giving himself up, he did not make anything verbal or written statement that could have been taken as the UDI. Thus the people were in utter confusion as to what they should do. An unknown army major of the federal army but a native of this land posted nearly 300 kms away in the port city of Chittagong rightly in the confusion declared not only the Independence of Bangladesh on the 26th March but also himself the President of the newly created republic, as we knew in Dhaka afterwards.

That soon after the 1971 war ended in December and the leader returned to Dhaka from detention in prison from Islamabad to take on the administration of Independent Bangladesh, a leaflet was circulated that claimed that the leader had made the UDI before his arrest on the 25th March, but very few people believed that. Even so, people lived with the mystery for some time.

The mystery started to unfold sometime later on as the leader's fury started to fall on Tajuddin Ahmad, the Prime Minister of the 1971 Government in Exile and the real architect of 1971 Independence. Many cynics naturally interpreted the sword on Tajuddin as disapproval of the way issues had been handled and sorted out by bringing in Indian armed interference. The cynics proved not wrong in facts of Tajuddin not only soon being sacked from the Ministry by the leader but also ended up in the Dhaka Central Prison.

Soon other events like famine deaths in thousands, emergency, banning of all political parties except the leaders own one (slightly changed nomenclature), proscribing newspapers etc. followed by the 1975 August coup and the 7th November uprising and changes of the government that brought further in prints about the issue of Declaration of Independence on the 26th and 27th March having had nothing of any direct nod, much less any written, neither typed nor handwritten paper from the leader. The fact about the leader's no consent whatsoever became clearer some time later on. For example, I had had one information directly in London in the fortnightly Impact International that quoted the renowned lawyer and the main Counsel in the famous treason case of 1971 against the leader A.K. Brohi stating that the leader did not want to break Pakistan (28th September, 1987, P.19), the other one in Stanley Wolpert's Zulfi Bhutto of Pakistan wherein the leader stood for 'Confederation' (1993, OUP. P.175), still another in Sarder M. Choudhury's The Ultimate Crime therein noted from his first hand information that the leader had had a very close understanding with President Yahya Khan since as early as March 1969 (Lahore, 1999, P. 98). All these not incredible facts should suffice to show that the big party leader of 1971 did not only go to make the UDI for Bangladesh but also opposed the break up of Pakistan. Like many, I personally clearly recall another fact of pre-1971 tragedy when the leader refused with all force at his command to be labeled as the 'secessionist'. If the facts cited in these documents and evidence are to be repudiated, one must put up credible documents for the leader in the matter of UDI in support of the changes and modification made in the school textbooks. Otherwise, it would not only be misrepresenting of facts in school textbooks but also be obvious feeding of falsehoods to our younger generation.

The fact remains though that no matter whatever had been the real intention of the leader and substance in the UDI, many in their good faith fought for the Independence of Bangladesh in 1971 for passion of charisma of the leader. But such passion in no way proves anything that the leader went duly to make the UDI on the 26th March 1971.

Should we not ponder a bit in depth that when our society is flooded with erosion of moral values almost at all levels and so we need to put up efforts to raise the moral standard of the next progeny through inclusion of truth and truth alone in learning contents in schools, inclusion of factitious or baseless contents about national leader/s can do no good but only add further to erosion of moral values ?

The fictitious changes thus made in 2008 in the contents of the relevant school textbooks should immediately be dropped by the CG.

The game of new politics by Clinton rules

David Brooks

BARACK Obama had a theory. It was that the American voters are tired of the partisan paralysis of the past 20 years. The theory was that if Obama could inspire a grass-roots movement with a new kind of leadership, he could ride it to the White House and end gridlock in Washington.

Obama has built his entire campaign on this theory. He's run against negativity and cheap-shot campaigning. He's claimed that there's an "awakening" in the country - people "hungry for a different kind of politics."

This message has made him the front-runner. It has brought millions of new voters into politics. It has given him grounds to fend off attacks. In debate after debate, he has accused Hillary Clinton and others of practising the old kind of politics. When he was under assault in South Carolina, he rose above the barrage and made the Clintons look sleazy.

Yet at different times during this election, he's been told to get off the white horse and start fighting.

In the current issue of Time magazine, Michael Duffy and Nancy Gibbs report on a meeting that took place in Chicago last Labour Day. All of Obama's experienced advisers told him: "You gotta get down, get dirty, get tough."

Obama refused. He argued that if he did that, the entire basis for his campaign would evaporate. "If I gotta kneecap her," he said, "I'm not gonna go there."

Now, the Obama campaign is facing another test. There are a few ways to interpret the losses in Texas and Ohio. One is demographic. He didn't carry the groups he often has trouble with - white women, Latinos, the less educated. The other is tactical. Clinton attacked him, and the attacks worked.

The consultants, needless to say, gravitate towards the tactical interpretation. And once again the cry has gone up for Obama to get tough. This advice gets wrapped in metaphors. Obama has to start "throwing punches" or "taking the gloves off."

Beneath the euphemisms, what the advice really means is that Obama has to start accusing Clinton of things.

This time, Obama, whose competitive juices are flowing, has apparently accepted the advice. The Obama campaign is now making a big issue of Clinton's tax returns and dropping hints about donations to President Bill Clinton's library and her secret White House papers. It's willing to launch an ethics assault. "If Senator Clinton wants to take the debate to various places, we'll join that debate," the Obama strategist David Axelrod told reporters the other day.

These attacks are supposed to show that Obama can't be pushed around. But, of course, what it really suggests is that Obama's big theory is bankrupt. You can't really win with the new style of politics. Sooner or later, you have to play by the conventional rules.

The Obama people seem to have persuaded themselves they can go on the attack, but in the right way. They can be tough and keep their virginity, too. But there are more than five long months between now and the convention.

Unless they consciously reject conventional politics, the accusations will build on each other. The BlackBerries will buzz. The passions will rise. The Obama forces will see hints of Clinton corruption all around, and they'll accuse and accuse again. The war will begin to take control, and once you're halfway through you can't suddenly surrender because it's become too rough.

And the Clinton people will draw them every step of the way.

Clinton can't compete on personality, but a knife fight is her only real hope of victory. She has nothing to lose because she never promised to purify America. Her campaign doesn't depend on the enthusiasm of upper-middle-class goo-goos. On Thursday, a Clinton aide likened Obama to Ken Starr just to badger them on.

As the trench warfare stretches on through the spring, the excitement of Obama-mania will seem like a distant, childish mirage. People will wonder if Obama ever believed any of that stuff himself. And even if he goes on to win the nomination, he won't represent anything new. He'll just be a one-term senator running for president.

In short, a candidate should never betray the core theory of his campaign, or head down a road that leads to that betrayal. Obama doesn't have an impressive record of experience or a unique policy profile. New politics is all he's got. He loses that, and he loses everything. Every day that he looks conventional is a bad day for him.

Besides, the real softness of the campaign is not that Obama is a wimp. It's that he has never explained how this new politics would actually produce bread-and-butter benefits to people in places like Youngstown and Altoona.

If he can't explain that, he's going to lose at some point anyway.

(International Herald Tribune)

The advancing economic crunch

Yan Wei

Despite recent efforts by the U.S. Government to help stimulate its battered economy, the country will continue to battle the stagnation sparked by the subprime mortgage crisis, Chinese international economics experts said.

The U.S. Federal Reserve announced on January 30 that it would slash the federal funds rate to 3 percent, the lowest since June 2005. About a week before this move, it had lowered the rate from 4.25 percent to 3.5 percent following stock market stumbles in Asia and Europe. The federal funds rate is the rate that banks charge each other to borrow money overnight. Lower interest rates make it easier for businesses and individuals to borrow money for purchases and other activities that help stimulate the economy.

On January 24, the U.S. Congress reached an agreement on a tax relief package that will give most taxpayers refunds of $600 to $1,200. The rebates, which are expected to be issued in June and cost some $150 billion, will benefit about 116 million U.S. families as well as businesses.

"These measures reflected Washington's concern over the U.S. economy," said Zhou Shijian, Standing Councilor of the China Association of International Trade. "The magnitude of the economic slowdown at home has far outweighed the Iraq issue. The Bush administration will make every effort to rescue the economy, especially in the run-up to the presidential election at the end of this year."

While the U.S. economy is growing at a low rate, it is too early to conclude that there is an economic recession, Zhou said. The series of policies adopted by the U.S. administration will help revitalize the

country's economy, but they will not take effect until the second half of the year, he said.

Some Chinese economists pointed out that the economic slowdown in the United States has far-reaching implications for China and the world at large. The U.S. subprime mortgage crisis has brought about great changes in the international financial landscape, giving rise to more uncertainties in the world economy, they said.

There is no doubt that a recession of the U.S. economy would adversely affect the world economy, said Jiang Yong, Director of the Center for Economic Security Studies at the China Institutes of Contemporary International Relations. The United States is the most important engine for the world economy. It is not only the world's largest consumer market, but also contributes greatly to the development of the global economy as a major technological innovator and source of foreign investment, he said.

If the U.S. economy goes downhill, the global economy will have to face severe consequences, Jiang warned. For example, sales of foreign products in the United States would drop in the wake of a slowdown of the U.S. economy. If American financial institutions run into problems, they would not be able to provide the world with top-quality financial services, he said.

For all these potential risks, Jiang said he finds it reassuring that the global economic structure has become increasingly diversified in recent years. The European economy has retained sound growth, thanks to its fruitful efforts to adjust its economic structure. Japan also has bid farewell to its economic stagnation. Most importantly, emerging markets such as China, Russia, India and Brazil have become the new engines driving world economic growth. Although they are not comparable to the United States, these countries will be able to help mitigate the risks resulting from a U.S. economic slowdown or recession, he said. "Given the positive role of emerging markets, robust economic growth in Europe and Japan's recovery, the impact of a U.S. economic recession should be neither underestimated nor exaggerated, " he said.

A conventional theory says that as China's economy "decouples" from the U.S. economy, the U.S. economic slowdown will not have much effect on the Chinese economy.

Zhang Ming, an assistant research fellow at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, pointed out that this theory has overlooked the close correlation between U.S. consumption and Chinese export and the fact that the American financial market can directly impact China's capital market given the capital flows in the context of financial globalization. Once the U.S. economy slows down, Chinese exporters may suffer losses because of the decline in U.S. consumption, Zhang said. Moreover, U.S. financial market turbulence may fuel fluctuations in China's asset prices.

"The recent U.S. economic slowdown has already taken a toll on China's exports. Chinese statistics show that the year-on-year growth of the country's exports to the United States continued to decline from the first quarter to the third quarter in 2007," said Zhou.

The United States is China's largest overseas market by country. Usually, an 1-percentage-point decline in the growth of the American economy will translate into 5-percentage-point reduction in China's exports to the United States, Zhou said.

In recent years, China not only has canceled export tax rebates for products whose manufacture causes heavy pollution and consumes huge amounts of energy and natural resources, but also has imposed export tariffs on them to control their export. Against this backdrop, the U.S. economic slowdown will further constrain China's export. "Chinese exporters will have a hard time in 2008," Zhou said.

If the U.S. Government takes more effective measures to stimulate the economy, the slowdown may be only temporary without having any significant effect on China's economy, Zhang said. But if an economic recession emerges in the United States, it will pose severe challenges to China's export sector and capital market, he said. An economic recession would lower consumption in the United States, thus reining in China's export growth from the demand side, he said. It may also heighten trade protectionism in the country, leading to more anti-dumping and anti-subsidy investigations against Chinese products and making them less competitive in the international market. A decline in the profitability of the export industry would severely affect China's economic growth and employment, he said.

In addition, Zhang said if the U.S. economy entered a recession, more short-term venture capital would surge into China, aggravating China's asset price bubble. However, whenever the U.S. economy has an economic recovery and the federal funds rate begins to go up, the capital tends to flow back to the United States, breaking the asset price bubble in China. A financial crisis usually breaks out in emerging markets after hitting developed countries, Zhang said. He believes China should be highly alert to this risky trend. China's benchmark interest rate for one-year deposits currently stands at 4.14 percent, 1.14 percentage points higher than the U.S. federal funds rate.

There is evidence to show that the U.S. subprime mortgage crisis has resulted in financial turbulence, but whether the turbulence will persist remains in question, Jiang said. Since July 2007, global markets have plummeted from time to time, foreign exchange markets have taken a roller-coaster ride, the prices of financial products have soared and large financial institutions such as Citibank and Merrill Lynch have suffered severe losses.

"To date, the measures taken by the United States and some other Western countries to address the subprime mortgage crisis have not worked well," Jiang said. The United States is at risk of an economic recession, he added.

The subprime mortgage financial crisis started in the United States in the fall of 2006 and prompted a sharp rise in home foreclosures. The crisis began with the bursting of the housing bubble in the United States and high default rates on "subprime" mortgage loans made to higher-risk borrowers with lower income or lesser credit history than "prime" borrowers. Within a year, it developed into a global financial crisis.

Since the collapse of the Bretton Woods system of international monetary management in 1971, financial turbulence has become the norm. If it becomes a persistent problem, it tends to have major implications for the global economy, Jiang said. Financial turbulence leads to an increase of speculative hot money and a decrease of mid- and long-term investment, thereby driving up the cost of resource allocation, he said. It also increases the cost of international trade because of the fluctuations in exchange rates.

All these factors add to the uncertainties and risks in the world economy, Jiang said.

The subprime mortgage crisis in the United States provides evidence for the changes in the international financial system, he said. The influence of International Monetary Fund (IMF) on the international financial system has declined partly because of its promotion of the controversial Washington Consensus, a market liberalization policy package that proved a failure in developing and transitional economies. It also has declined because many emerging markets with large foreign exchange reserves are forming regional cooperative arrangements without resorting to the IMF or developed countries, he said.

The influence of the Group of Eight (G8) is also on a downward spiral, Jiang said. The major industrialized countries that comprise the G8 now can exert some influence only by holding an outreach session with major developing countries, he said. The Organization for Economic Cooperation and Development, a rich countries' club, has also seen its influence over the world economy decline, he added.

As changes take place in the international financial arena, the United States can no longer dominate the system, Jiang said. Instead, the country seeks to transfer many of its own risks to the international market, making it ever more turbulent, he added. The ongoing international financial market turbulence has exposed the flaws in the Western financial system, he said. Western financial giants such as Citibank, HSBC and Merrill Lynch are not immune to corporate governance problems.

Given these changes, Jiang stressed the need to monitor the risk transfer of the United States and other Western countries. Western financial institutions have long been coveting the high profitability and huge financial assets of emerging economies. At a time of international financial turbulence, Western countries are likely to push the emerging countries even harder to open their financial markets, he said.

Because Western financial institutions have grown weak following the U.S. subprime mortgage crisis, the role of China and other emerging countries in the international financial market has become more pronounced. China can take this opportunity to enhance its standing in the international financial system and seek a bigger say on international financial issues, Jiang said.

Zhou at the China Association of International Trade believes this is an occasion for China to balance its international trade and increase overseas investment. If China's exports decline because of the economic slowdown in the United States, its currency will face less pressure to appreciate, he said. Against the backdrop of a sluggish world economy, the prices of energy products such as oil are projected to drop. China can increase its oil imports to boost its strategic oil reserves. It also will be able to purchase more hi-tech products. The growth in imports will help China strike a balance in its international payments, he said.

Given the lack of funds in the international market, China Investment Corp., the country's sovereign wealth fund that was set up in September 2007, can make more investments in foreign nations, thereby contributing its part to the world economy, Zhou said.