Dr.DEBESH BHOWMIK

Dr.DEBESH BHOWMIK

Saturday 16 May 2015

INDO-CHINA BUSINESS




INDO-CHINA BUSINESS.


China and India today represent Asia’s two largest and most dynamic societies which are emerging as new trend setters in international relations. Especially, with their annual GDP growth rates. China and India have since come to be recognised as the fastest growing economies. According to World Bank estimates, and assessed on the basis of purchasing power parity, China and India have already become respectively the second and fourth largest economies of the world surpassing developed countries. The context of China-India bilateral trade itself—bilateral as well as regional and global—has been changing rapidly. At the bilateral level, this is self-evident in the way their rapidly growing trade partnership has provided a great boost to their ongoing political confidence-building. It is the nature of China-India bilateral trade as a confidence-building measure that must be underlined to appreciate its interface with their political relations which remains so critical for its long-term prospects. Therefore, more than being measured in terms of statistics and profits, it is the political impact of trade which remains the barometer of their economic engagement. Both sides clearly display that understanding at least in their more recent initiatives. Moreover, with the inclusion of India’s trade with Hong Kong and Macao (as also India’s rising trade with Taiwan, and the possibility of an eventual unification of Taiwan), Greater China has already emerged as India’s largest trading partner and one of its kind. Major items of export from India to China remain iron and chrome ore, plastic and linoleum, marine products, cotton yarn and fabrics, organic and inorganic chemicals, dye intermediates, bulk drugs and pharmaceuticals, construction quality wire rods, tobacco and tea, while China’s exports to India include items like raw silk and silk yarn, coking coal, some types of chemicals, pulses, mercury and antimony, freshwater pearls, pig iron, newsprint and several low-technology consumer items. Gradually, many new sectors—like border trade or high-tech trade—are being also explored while information technology and infrastructure development are already emerging as major areas for co-operation. China now accounts for over 5% of India’s total foreign trade which creates substantial stakes for mutual co-operation.In spite of that the notable fact is that India’s trade balance has gone unfavourable and it is increasing too.India’s growing deficit trade with China has a strong inverse impact to India’s economy although its volume of bilateral trade is stepping upward.Morever, FDI inflows from China is increasing too which has significant future impact on service sector.

India is a strategic partner in East Asian financial integration and Asian integration too where India’s role in forming Asian Monetary Fund may be given importance in the zonal leadership of China and Japan.Otherwise, Asian Monetary Fund will find incompleteness in the process of financial integration.
However,Mody’s visit in Indo-China Business Forum in China which assures 22 billion dollar for forthcoming business may be positive in the consensus on financial integration in increasing business.But this outlook will go in favour of India if trade balance appears to be India’s favour.

Thursday 14 May 2015

WHAT IS HUMAN CAPITAL INDEX





WHAT IS HUMAN CAPITAL INDEX


The Human Capital Index is a new measure for capturing and tracking the state of human capital development around the world. It has three key features. First, the Index measures a broader set of indicators than the traditional definitions of human capital. Human capital is not a one–dimensional concept, but means different things to different stakeholders. In the business world, human capital is the economic value of an employee’s set of skills. To the policy maker, human capital is the capacity of the population to drive economic growth. Traditionally, human capital has been viewed as a function of education and experience, the latter reflecting both training and learning by doing. But in recent years, health (including physical capacities, cognitive function and mental health) has come to be seen as a fundamental component of human capital. Additionally, the value of human capital is critically determined by the physical, social and economic context of a society, because that context determines how particular attributes a person possesses may be rewarded. The Index is thus based on four pillars: three core determinants of human capital (education, health and employment) plus those factors that allow these three core determinants to translate into greater returns. Second, the Index takes a long–term approach to human capital. In addition to providing a snapshot of the state of a country’s human capital today through measures that reflect the results of a country’s past practices, it includes indicators resulting from practices and policy decisions impacting the children of today and which will shape the future workforce. Long–term thinking around human capital often does not fit political cycles or business investment horizons; but lack of such long term planning can perpetuate continued wasted potential in a country’s population and losses for a nation’s growth and productivity. The Index seeks to develop a stronger consciousness around the need for such planning. Third, the Index aims to take into account the individual life course. For example, the WHO states that A nation’s human capital endowment—the skills and capacities that reside in people and that are put to productive use—can be a more important determinant of its long term economic success than virtually any other resource. This resource must be invested in and leveraged efficiently in order for it to generate returns, for the individuals involved as well as an economy as a whole. Additionally, despite high unemployment in many countries, the global economy is entering an era of talent scarcity that, if left unaddressed, will hinder economic growth worldwide. Understanding and addressing challenges related to human capital is thus fundamental to short term stability as well as the long term growth, prosperity and competitiveness of nations. The Human Capital Index explores the contributors and inhibitors to the development and deployment of a healthy, educated and productive labour force, and has generated the information contained in this Report. The Index provides country rankings that allow for effective comparisons across regions and income groups. The methodology and quantitative analysis behind the rankings are intended to serve as a basis for designing effective measures for workforce planning. While the rankings are designed to create greater awareness among a global audience, the Index also seeks to serve as a basis for dialogue and action by leaders at the World Economic Forum to increase public–private collaboration on developing human capital. The Human Capital Report “early childhood is the most important phase for overall development throughout the lifespan,” elaborating that “many challenges faced by adults, such as mental health issues, obesity, heart disease, criminality, and poor literacy and numeracy, can be traced back to early childhood.” The Index thus includes measures indicating quality of early childhood. Furthermore, the Index captures the extent to which investments made in earlier years in health and education are being realised in the working age population through lifelong learning and training. Finally, at the other end of the continuum, the Index takes into account the health and productivity of the older population. As a vital support to the Index, the Country Profiles included in this Report contain a wide variety of contextual factors. In particular, the Profiles call attention to population dynamics, such as youth bulges, ageing populations and shrinking workforces, which, in the context of limited resources, point to critical areas for urgent– and longer– term investments. The four pillars of the Index are: • The Education pillar contains indicators relating to quantitative and qualitative aspects of education across primary, secondary and tertiary levels and contains information on both the present workforce as well as the future workforce. • The Health and Wellness pillar contains indicators relating to a population’s physical and mental well– being, from childhood to adulthood. • The Workforce and Employment pillar is designed to quantify the experience, talent, knowledge and training in a country’s working–age population. • The Enabling Environment pillar captures the legal framework, infrastructure and other factors that enable returns on human capital. The Index contains 51 indicators in total, spread across the four pillars, with 12 indicators in the Education pillar, 14 in the Health and Wellness pillar, 16 in the Workforce and Employment pillar and nine in the Enabling Environment pillar. The values for each of the indicators come from publicly available data produced by international organizations such as the World Health Organization (WHO), the United Nations Educational Scientific and Cultural Organization (UNESCO) and the International Labour Organization (ILO). In addition to hard data, the Index uses qualitative survey data from the World Economic Forum’s Executive Opinion Survey and Gallup’s wellness perception survey data.
To standardize the dataWEF used the z–score statistic as it preserves the distribution of the data, a feature most relevant for a comparative international composite index. Z–scores are expressed as standard deviations from the mean. The mean is zero and has a standard deviation of one. This means that all data points above the mean are expressed as positive scores and all data below the mean are expressed as negative scores. The z–scores methodology is based on an assumption of the normal distribution. A standard deviation of plus (minus) 1 represents the area 34.13% above (below) the mean (zero) and a standard deviation of plus (minus) 2 represents the area 47.72% above (below) the mean. The z–score of a data point indicates the number of standard deviations above or below the mean. So a z–score of –2 is exactly two standard deviations, or 47.72%, below the mean. The z–score approach is a widely used way of converting raw data that is expressed in differing formats into a common metric (standardizing).
Globally, Finland tops the rankings of the Human Capital Index in 2015, scoring 86% out of a possible 100. Norway (2), Switzerland (3), Canada (4) and Japan (5) make up the rest of the top five. They are among a group of only 14 nations that have crossed the 80% threshold.
In addition to the 14 countries that have reached 80% human capital optimization, 38 countries score between 70% and 80%. A further 40 countries score between 60% and 70%, while 23 countries score between 50% and 60% and nine countries remain below 50%.
The Human Capital Index reveals several trends and challenges in the current education, skills and jobs agenda and the future outlook for major economies. These developments imply that we need to rethink how the world’s human capital endowment is invested in and leveraged for social and economic prosperity and the well-being of all. Similar to all global challenges in which our existing systems, structures and formal institutions no longer suffice, the world needs a new level of global cooperation on education, skills and jobs. Governments, business leaders, educational institutions and individuals must each understand the magnitude of the change underway and fundamentally rethink the global talent value chain. In order to be proactive in our response to both the current predicaments and a highly uncertain future, we must re-think what it means to learn, what it means to work and what is the role of various stakeholders in ensuring that people are able to fulfil their potential.
In the Table below, we can compare the indices among some of the top  countries.


Wednesday 13 May 2015

POVERTY AND HUNGER WITH SPECIAL REFERENCE TO AFRICA




 ---------------Debesh Bhowmik


Hunger concepts and definitions
Hunger is a term which has three meanings (Oxford English Dictionary 1971)
  • the uneasy or painful sensation caused by want of food; craving appetite. Also the exhausted condition caused by want of food
  • the want or scarcity of food in a country
  • a strong desire or craving
 hunger refers to the second definition, aggregated to the world level.

The related technical term is malnutrition, or, if malnutrition is taken to refer to both undernutrition and overnutrition (obesity, overweight) as it increasingly is, undernutrition.  Both malnutrition and undernutrition refer to the effects on people of not having enough food. 
There are two basic types of malnutrition/undernutrition. The first and most important is protein-energy malnutrition .  This leads to growth failure.  Principal types of growth failure are:
  • The two types of acute malnutrition are wasting (also called marasmus) or nutritional edema, (also called kwashiorkor).  Wasting is characterised by rapid weight loss and in its severe form can lead to death. Nutritional edema is caused by insufficient protein in the diet. ...
    .
  • Stunting is a slow, cumulative process and is caused by insufficient intake of some nutrients. It is estimated by the United Nations Children’s Fund (UNICEF) to affect 161 million children  world wide  (UNICEF Nutrition).  Stunted children may have normal body proportions but look younger than their actual age. Stunting develops over a long period as a result of inadequate nutrition or repeated infections, or both.
The second type of malnutrition, also very important, is micronutrient (vitamin and mineral) deficiency. This is not the type of malnutrition that is referred to when world hunger is discussed, though it is certainly very important.  Specific examples of micronutrient deficiency such as Vitamin A are discussed below
The United Nations Food and Agriculture Organization estimates that about 805 million people of the 7.3 billion people in the world, or one in nine, were suffering from chronic undernourishment in 2012-2014. Almost all the hungry people, 791 million, live in developing countries, representing 13.5 percent, or one in eight, of the population of developing counties. There are 11 million people undernourished in developed countries .
Undernourishment around the world, 1990-2 to 2012-4
Number of undernourished and prevalence (%) of undernourishment

1990-2 No.
1990-2 %
2012-4 No.
2012-4 %
World
1,014.5
18.7
805.3
11.3
Developed regions
20.4
<5
14.6
<5
Developing regions
994.1
23.4
790.7
14.5
Africa
182.1
27.7
226.7
20.5
  Sub-Saharan Africa
176.0
33.3
214.1
23.8
Asia
742.6
23.7
525.6
12.7
  Eastern Asia
295.2
23.2
161.2
10.8
  South-Eastern Asia
138.0
30.7
63.5
10.3
  Southern Asia
291.7
24.0
276.4
15.8
Latin America & Carib.
68.5
15.3
37.0
6.1
Oceana
1.0
15.7
1.4
14.0

Poverty is the principal cause of hunger. The causes of poverty include poor people's lack of resources, an extremely unequal income distribution in the world and within specific countries, conflict, and hunger itself. As of 2015 (2011 statistics), the World Bank has estimated that there were just over 1 billion poor people in developing countries who live on $1.25 a day or less.  This compares with compared with 1.91 billion in 1990, and 1.93 billion in 1981.  This means that 17 percent of people in the developing world lived at or below $1.25 a day in 2011, down from 43 percent in 1990 and 52 percent in 1981.  (This compares with the FAO estimate above of  791 million people living in chronic undernourishment in developing countries.) Progress has been slower at higher poverty lines. In all, 2.2 billion people lived on less than US $2 a day in 2011, the average poverty line in developing countries and another common measurement of deep deprivation. That is only a slight decline from 2.59 billion in 1981.  Progress in poverty reduction has been concentrated in Asia, and especially, East Asia, with the major improvement occurring in China. In Sub-Saharan Africa, the number of people in extreme poverty has increased.  The statement that 'poverty is the principal cause of hunger'  is, though correct, unsatisfying. 
Hunger is also a cause of poverty, and thus of hunger. By causing poor health, small body size, low levels of energy, and reductions in mental functioning, hunger can lead to even greater poverty by reducing people's ability to work and learn, thus leading to even greater hunger.
  • 1.4 billion people in developing countries live on $1.25 a day or less.
  • Rural areas account for three out of every four people living on less than $1.25 a day.
  • 22,000 children die each day due to conditions of poverty.
Rural Hunger Project partners have access to income-generating workshops, empowering their self-reliance. Our Microfinance Program in Africa provides access to credit, adequate training and instilling in our partners the importance of saving.

Poverty in Africa.
In 1990, 56 percent of Africans lived on under $1.25 a day accounting for 15 percent of those in poverty worldwide. Over the subsequent 20 years, the region’s poverty rate dropped to 48 percent. However, given the superior pace of poverty reduction elsewhere and Africa’s faster population growth, Africa’s share of global poverty doubled. Our baseline scenario anticipates a continuation of these trends: sub-Saharan Africa’s poverty rate is expected to fall further to 24 percent by 2030, representing 300 million people, but its share of global poverty balloons to 82 percent. By 2030, 21 percent of Africa’s population will be poor having stood behind the 70 cent mark today. This rate would be sufficient to lift those currently living on 70 cents or more above the $1.25 a day poverty line by 2030. This level happens to be around the average daily income of the poor in sub-Saharan Africa today. Twenty-two percent of Africans live between the 70 cent and $1.25 mark, while 25 percent live further back on under 70 cents.

In 1990, 56 percent of Africans lived on under $1.25 a day accounting for 15 percent of those in poverty worldwide. Over the subsequent 20 years, the region’s poverty rate dropped to 48 percent. However, given the superior pace of poverty reduction elsewhere and Africa’s faster population growth, Africa’s share of global poverty doubled. Our baseline scenario anticipates a continuation of these trends: sub-Saharan Africa’s poverty rate is expected to fall further to 24 percent by 2030, representing 300 million people, but its share of global poverty balloons to 82 percent.
The constraint facing these remaining poor can be characterized in two ways.
First, the poor may not be moving fast enough to reach the $1.25 threshold. This is a function of the rate of economic growth in the countries in which they live, and the degree to which this growth is equitable. Historically, sub-Saharan Africa has experienced long stretches of anemic growth. During the lost decades of the 1980s and 1990s, the region grew at just 2 percent a year, which meant that GDP per capita fell given the rate of population growth. Though growth in the region as a whole has improved in recent years, some countries continue to underperform and there are concerns that the benefits of Africa’s growth are not being shared by those near the bottom of the income distribution.
Second, the poor in Africa may start too far behind the poverty line to stand a chance of reaching the $1.25 mark any time soon. Even under an assumption of strong and equitable growth, 20 years may be insufficient to lift these people out of poverty given the distance they have to travel. As critics of the Millennium Development Goals have shown, setting targets in absolute terms risks putting goals out of reach for those starting furthest behind.
Which of these impediments best captures sub-Saharan Africa’s challenge: are the region’s poor moving too slowly or starting too far behind?
To help answer this question, it is useful to first establish some parameters linking past regional trends, today’s circumstances and future prospects.
Over the last decade, sub-Saharan Africa’s economies have together mustered an impressive 5 percent growth a year, or around 3 percent in per capita terms (see Table below). Evidence from household surveys suggests that this has, on average, translated into gains for the poor: of the countries in the region with available data, half saw per capita consumption of the poorest 10 percent of their populations rise by 3 percent or more a year during the period. Forecasts indicate that growth rates should remain high in the foreseeable future, so it is not unreasonable to expect that a 3 percent annual increase in income is sustainable for many of those living in poverty.
This rate would be sufficient to lift those currently living on 70 cents or more above the $1.25 a day poverty line by 2030. This level happens to be around the average daily income of the poor in sub-Saharan Africa today. Twenty-two percent of Africans live between the 70 cent and $1.25 mark, while 25 percent live further back on under 70 cents. 

Of course, Africa’s aggregate economic performance masks considerable differences between countries, and the location of the region’s growth engines doesn’t align exactly with the location of its poor. Over the past decade, 11 economies in the region experienced virtually no growth (Benin, Central African Republic, Comoros, Cote d’Ivoire, Gabon, Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar and Swaziland), while four economies are expected to stagnate over the coming years based on present forecasts (Comoros, Madagascar, Malawi and Swaziland). For these sluggish performers, the pace of progress is such that living within reach of the poverty line today offers little assurance of escaping poverty in the foreseeable future. Three percent of Africans in 2030 are expected to be poor simply because their country growth rates lag behind regional performance. These individuals start between 70 cents and $1.25 and remain there two decades later. We classify these poor people as moving too slowly. (Head count ratio indicates poverty in the Table)