Today is the first of January 2012, a new year has begun. It will bring joy and happiness for many, some will suffer and some will struggle. That is the reality of life.

2012 will be a challenging year for small businesses across the globe. With deepening economic crisis in Europe, threat of Euro zone and Euro, possibility of Greece and Italy defaulting and push to convince Germany to take the hit by paying for financially strangled nations in Europe, things are not promising!

The US Economy continued in depression since 2007. Although, US economists and the media, including New York Times. Los-Angeles Times, Wall Street Journal, Herald Tribune have acknowledged US economic growth in 2011, the consumer market still looks dull!

Middle East remained a turbulent region during 2011; it is highly unlikely for this region to perform well in the New Year.

According to Moody’s, Asia Pacific economies are going to see some slowdown mainly reflecting upon the economic crisis in Europe. There are chances of recovery in the second half of 2012, but a lot depends on how well the US and European economies perform!

The situation is alarming and a number of businesses particularly domestic businesses in smaller economies will be required to play safe. To be able to survive, small businesses must focus avoiding four major mistakes during 2012:

Expansion without growth:

A number of enthusiasts consider expansion as a tool to increase revenue. A major misconception! Before expansion starts brining revenue, a lot needs to be spent on hiring people, capital expenditure, benefits, marketing etc. If the market does not offer some growth potential in the normal course, expansion will be self-destructive!

Underutilized resources:

It is often seen that companies fail to optimize their resources. Spend time and energy in identifying the right potential of your human and other resources and engage them at an optimal level to achieve maximum output. Any underutilized resources, is money going down the drain!

Increasing Cost of Doing Business:

Cost of doing business increases exponentially for companies that are not managing their accounts well. One of the ways to keep the cost of doing business low is by balancing the receivables and payables. This reduces the financial cost of your businesses. Save energy, manage productivity and reduce cost of inventory – somehow keep strong focus on reducing your cost of doing business.

Saying no to technology:

In this world of social networking, digital marketing and technological advancement, it is highly lethal to delay integrating technology in your business model. Small or big, businesses need to learn how best they can deploy technology.. Social Media and Digital marketing is particularly supportive in case of local retail businesses. Technology is something cannot be ignored in 2012!

I wish you all a very Happy and prosperous 2012!

Revered for being a symbol of courage and dignity; cherished for being a role model for people suffering from any form of disability; and adored for being an exceptional human being which this world was so badly in need of, Saima Ammar — the chief executive officer of the Pakistan Foundation Fighting Blindness (PFFB)-breathed her last at the age of 41 here early Thursday morning.

Having lost her eyesight to a typhoid attack at the tender age of two-and-a-half years, Saima accepted her impairment without any regrets and never permitted her disability to stand in way of her resolve to transform the lives of disabled people who were not fortunate enough to have been brought up, groomed and educated like her. Saima converted her disability into a mental and spiritual strength, and accomplished in her short lifetime, what people blessed with all senses seldom do.

In August last year, Saima was diagnosed with Multiple Sclerosis, a nervous disorder which paralysed her body, neck-down. With her family member and husband Ammar Masood by her side, Saima braved three months of hospitalisation on a ventilator before stabilizing enough to be shifted home. At home, a mini-ICU laced with all necessary equipment was installed to keep her going in an infection-free environment. Saima struggled with the disease for almost a year. “She was a lovely child. Not once did she utter a word of complaint. She remained as peaceful and calm throughout the period of her illness, as she appears today,” sobbed her father Brigadier (r) Niaz Ahmed, as he caressed her lifeless being.

Talking to this scribe over the last few days, Ammar shared that Saima was always thankful for not having any reminiscences of vision because she always said that she doesn’t know what to miss. “I am yet to come across someone with as much resilience and willpower as Saima,” said Ammar who, throughout the period of her illness, maintained constant liaison with leading doctors worldwide, updating them with her condition in the hope that they would find a cure.

Saima’s first meeting with Ammar took place at Audio World, a PFFB project which records books of all genres for visually impaired people. An avid radio listener, Saima was particularly fond of a late night ‘Ghazal Time’ show, which Ammar used to host. They met each other through a mutual friend; just like Saima was impressed by his voice, so too was he impressed with her work and persona. Ammar offered voluntary services to Audio World and started recording cassettes for it. Their bond gained strength with time, and eventually on October 30, 1997, they entered into wedlock.

Saima travelled to numerous countries, attending international conferences on disability issues. She attended the UN Women Conference in Beijing, the Retina International Conference in Japan, and the13th World Congress of Retina International in Netherlands. She was also instrumental in organizing the first International Seminar on Retinitis Pigmentosa and Allied Retinal Dystrophies by PFFB in June 2006. In 2008, she became the first blind person from Pakistan to have been nominated to attend the International Visitor Program of the Bureau of Educational and Cultural Affairs, USA. Her last trip was to Italy where she addressed an International Retina Conference. She was so pained by the plight of visually impaired persons in Pakistan that she broke into tears.

Saima was chosen CEO of PFFB three years ago, following the death of Dr. Salma Maqbool, who was another beacon of hope for the disabled. She worked on five different projects for the blind namely, Audio World, Darakhshan (resource training centre for disabled women), medical research project, first internet café for the blind, and data collection of blind persons.

“Unlike Saima, most people with disabilities are not fortunate enough to have led a ‘pampered life,’ as she used to describe it,” Ammar said. When she lost her eyesight, her parents knew that she would have no future in Pakistan so they sent her to London, where she studied up to A-levels. On return, she completed her Masters in International Relations from Quaid-i-Azam University and was hoping to appear for the CSS exam until her eligibility was challenged on medical grounds. Disheartened, she dedicated her life in the service of blind people.

Saima’s life is an example of courage, hope and determination. Hers was an amazing struggle, which inspired the young and old, and the able and disabled alike. (May Allah rest her soul in peace).

Courtesy: The News

Just read this article on Dawn (by AFP) and thought I’d share it:

http://www.dawn.com/2011/12/30/offbeat-stories-from-2011.html

Among offbeat and zany stories from the year just ending:

- The bad news for a group of employees in a Canadian technology company was that the firm was closing down and laying them off. The good news, received the same day, was that 10 of them had jointly won the equivalent of 7.1 million dollars in the state lottery.

- Faced with a school ban on boys wearing short rather than long trousers in hot weather, a 12-year-old British pupil registered his protest by showing up in a skirt.

- A woman in Sicily who had put off paying a three-year-old parking fine got a shock when she opened a letter telling her it had shot up to 32,000 euros, including interest. An absent-minded official had typed in the date of the violation as ’208′, rather than ’2008′, and the computer had done the rest.

- Following a trend set by Knut, a cuddly polar bear cub, and Paul, an octopus that was touted for predicting World Football Cup results, a German zoo promoted Heidi, the cross-eyed opossum. Alas, the squint-eyed marsupial died in the course of the year, but not before her photo had drawn millions of laughs on the Internet.

- Also in Germany, an enterprising cow named Yvonne escaped from a herd about to be slaughtered and spent three months evading both the police and the media in the southern region of Bavaria. When caught, she was given refuge in an animal sanctuary.

- Fans of the local football team in the southwestern French town of Dax were bemused when their website was attacked by hackers sending them vengeful messages in German. The protesters had mistaken it for the official site of Germany’s main stock market index, the DAX.

- British power stations recorded one of their biggest surges in energy demand ever just as live TV coverage of the country’s royal wedding was drawing to a close. Engineers attributed the excess to around a million people putting on their electric kettles at the same time to make tea.

- The central Asian nation of Uzbekistan organised a key university entrance exam for all students on a single day. Just as the event began, the country’s five mobile phone operators shut down all text-messaging services, citing “urgent maintenance” but in fact nipping in the bud any possibility for students to use them to cheat.

- Radio listeners in Israel heard their foreign minister, Avigdor Lieberman, being interviewed from the comfort of his home. As the interview ended, they clearly heard the sound of his toilet flushing.

- A poverty-stricken 75-year-old woman in the Caucasian republic of Georgia cut off all Internet access in both her home country and neighbouring Armenia when she inadvertently sliced through a cable while foraging for scrap metal.

- A huge electronic counter set up in London’s Trafalgar Square to provide a 500-day countdown to the start of the city’s Olympic Games not only stopped functioning, but started going backwards.

- A young girl in Australia who used an Internet site to issue an open invitation to her 16th birthday party had to cancel it after 200,000 people said they were coming.

- A Dutchman who drove his expensive sports car at almost 300 kilometers (180 miles) an hour on a Belgian highway was caught because he couldn’t resist putting a film of the exploit, along with pictures of the speedometer and commentary on the type of car, on the video sharing web site “YouTube”.

- A 36-year-old woman in Italy filed for divorce just a month after getting married. The reason: her new husband had insisted on bringing his mother along on their honeymoon.

- Chinese TV viewers thought there was something familiar about a sequence on the news supposedly showing the country’s warplanes going through their paces. And there was: it turned out that the footage was from the hit US film ‘Top Gun’.

- A group of white doves released from the Vatican during a sermon by Pope Benedict XVI refused to play their roles as symbols of peace. Rather than soaring up into the air, they simply flew straight back in through the window.

- A man arrested for credit card fraud in South Korea was found to have kept a detailed diary of a long career of burglaries, containing the addresses of houses he had broken into and details of what he had taken. His home also contained many of the stolen items.

Funny Photoshopped Pictures | Forward this Picture

The Eurofighter is a highly maneuverable multirole Military fighter presently being developed by a 4 nation consortium consisting of Nice Britain, Germany, Italy, and Spain. In the late Nineteen Seventies, quite a lot of European air forces had been confronted with the fact that their fighter fleets had been beginning to appear outdated in

Russia became the world’s second largest arms exporter in 2011 after the
United States, the head of the Moscow-based arms think tank Centre for
Analysis of World Arms Trade (CAWAT), Igor Korotchenko said on Friday.

The CAWAT ranking revealed that Russia occupied the second position for
world arms sales in 2011 with $11.29 billion in revenues, which accounts
for 16.1 percent of all international arms supplies, Korotchenko said.
“The forecast for 2012 is $11.3 billion or 17.3 percent of global arms
sales.”

The Unitied States, however, dominates world arms exports, with over 40 percent of trade globally, or $28.76 billion.

Korotchenko also said that Russia had scored high records on arms
exports despite the fact that it had lost the Iranian market because of
the arms embargos imposed on Tehran by Washington. Moscow also supported
arms sanctions against Libya, suspending all contracts for the supply
of military hardware to the country.

The top ten biggest arms suppliers include France, Germany, Britain,
Italy, Israel, Spain, Sweden and China, according to the CAWAT ranking.

READ MORE

The year 2011 for Southern Africa, and sub-Saharan Africa in general, will probably be remembered for what did not happen in the light of the people-powered uprising and protests that swept across the globe.

In the Arab world, in particular North Africa, what is being now referred to as the Arab Spring made 2011 a tough year for the dictatorial regimes of Zine al-Abidine Ben Ali in Tunisia, Hosni Mubarak in Egypt, and of course Gaddafi, who was killed in Libya. In the Western world, a movement that started as Occupy Wall Street in New York stirred up similar protests across major cities in the US, Britain, Italy, Germany, France, Spain, Portugal and Asian countries as citizens fought back against growing greed and inequality. Public anger over the debt crisis brought down Prime Minister George Papandreou and Silvio Berlusconi in Greece and Italy respectively.

Yet, despite the Southern African region’s high level of poverty, unemployment, and inequality, we did not see a wave of public anger similar to what we have seen across the globe. In a case study of five Southern African countries, the Open Society Initiative for Southern Africa has found that poverty and inequality is tearing apart Zimbabwe, Swaziland, Malawi, Namibia, South Africa and Angola, with many citizens living on a mere US$1 per day. The irony here is that some of those countries, such as Namibia and South Africa, are resource-rich countries with some of the highest GDP in the world.

Amid this global backlash against greed and inequality, why were most Southern African streets (apart from isolated and sporadic protests in Malawi and Swaziland) empty, quiet, and business as usual? What happened to the militant spirit that has sent many young people toyi-toying in the streets of Namibia, Zimbabwe, and South Africa against colonialism, poverty, and social injustice in the 60s and 80s?

One answer given for this widespread citizenry indifference in Southern African has been explained in terms of the belief that some of the governments in the region would not hesitate to use harsh measures if confronted by an Arab Spring-like mass action. True to this, in Zimbabwe some 45 activists were rounded up and charged with treason for watching a Mideast uprising video. In Malawi, the security force launched a violent crackdown on the protestors, leaving at least 18 protestors dead. In Swaziland, pro-democracy activists were banned, arrested, tear-gassed, and sprayed with water cannons.

It is also true that when the uprising was under way in Tunisia, Egypt and Libya, none of the Southern Africa governments (well, South Africa maybe did but flip-flopped later to save face with the radicals within the ANC and other hawkish Africanists in the region) picked up a phone to urge Mubarak, Gadaffi, or Ben Ali to exercise restraint in dealing with the protestors. Instead, what we heard from Southern African governments was the usual song of complaint about Western interference in Africa’s internal matters.

But here is another explanation: Southern African citizens’ indifference can be explained in a “been there and done that” syndrome. This is because in some ways Southern Africa is a little bit ahead of North Africa in terms of democratization, meaning that most governments in Southern Africa are products of democracy and came to power through elections. Whereas North Africa might have been stable and economically advanced but did not have democratic governments. However, a distinctive characteristic of the southern African democracy is that not only we have a democracy without democrats but also a democracy without citizens. Southern Africa’s democracies did not and do not produce citizens but subjects controlled by governments due to the hierarchical nature of Southern African politics which demands obedience and loyalty from citizens. Why? Although they claim to have fought for democracy (such as SWAPO in Namibia, ANC in South Africa, MPLA in Angola, FRELIMO in Mozambique and ZANU-PF in Zimbabwe), most ruling parties in Southern Africa don’t operate as democrats. Their politics and decision making processes are highly centralized. By the way, the same can also be said about most opposition political parties too.

It is against the backlog of this unquestioning and uncritical citizenry, that we understand why Mugabe is still in power today and why most ruling parties in that region have won elections with landslide victory. This is why the Namibian president can place a moratorium on public discussions about the SWAPO presidential succession. And this is why the ANC-dominated National Assembly in South Africa can pass a law (reversing the gains made against apartheid repressive laws and policies) to limit free speech.

On the flip side, events in North Africa made the world forget (as the international media and world government shifted its attention to the Arab Spring) about Southern Africa, especially with regard to what’s going on in Zimbabwe and Malawi

Here are a few predictions for 2012: The ruling party SWAPO’s 2012 election campaign to replace the incumbent Namibian president when his term expires is shaping up to be between Geingob (who is the vice president of SWAPO) and me Pendukeni Ithana (who is the secretary of SWAPO). One is believed to be a technocrat and the other a populist. But both are insiders, so expect less change here if either of them wins. What is clear, however, is that another potential split (this would be the third split if it happens) from the ruling party is looming as the in-fighting has already started. More is too come as we inch closer to Election Day.

In Zimbabwe, it is clear that the opposition party MDC (MDC has lost the mojo, and has been weakened by in-fighting too) is not the party that will bring down Mugabe (as it was hoped), but expect a potential split within the ruling ZANU-PF party. As Mugabe’s health continues to deteriorate, we expect infighting as members vie for control and Mugabe’s position.

On the other hand, South Africa will continue walking the populist road and of course with less transparent governance. Unless restored, expect the worst from Malawi because its life line support, which is aid from the international community, has been cut off, which is going to make life difficult for ordinary citizens. Angola and Mozambique (riding on oil) will continue unabated because we don’t really hear much about these two countries in terms of international coverage anyway. The remaining question is will Swaziland eventually collapse economically, or has it already collapsed?

FPA Russia Blog Studios presents……Russia’s top box office hits of 2011

GOODBYE BREZHNEV

As the traumatic events of the 90s send Mother Russia into a coma from which she takes a decade to recover, dutiful son Vova worries that any further shocks to her system might trigger a catastrophic relapse. Thus, he decides to dupe her into thinking she is still living in the Brezhnev era. Using an elaborate collection of props salvaged from the historical scrapheap, he and videographer friend Surkov recreate the late Soviet landscape by cracking down on free speech and assembly, and turning all television programmes into crude pre-recorded montages of vapid government pronouncements leavened with old Soviet movies. Yet as she goes about her illusory life oblivious to the changes outside, Vova and Surkov decide to steal her wallet and deposit her life savings into their Swiss bank accounts. Grateful for her son’s care but suspecting that she is being lied to and patronised, she eventually sneaks out of the apartment and into the streets, only to be quickly detained by riot police for her own safety.

Director’s (Censored) Cut Edition now available in diamond embossed DVD box set. Recommended retail price: $40 billion. Complimentary Swiss watch with each purchase.

UP IN THE AIR (THE STORY OF A MAN NOT READY TO LOSE AN ELECTION)

Vladimir Putin plays an ageing but suave and smartly (un)dressed strongman in his 50s, who is unable to slow down and give up his increasingly alienating job – one that involves firing (at) journalists and democracy activists. Blinkered by his ambition to achieve a life-long goal of four presidential terms, he finds himself no longer able to develop emotional ties with the people. Thus, even the announcement of his imminent appointment to 12 more years at the helm fills him with a vague and anticlimactic sense of emptiness. The otherwise poignant film (Putin delivers a powerful cross between Al Pacino in Scarface, Marlon Brando in Last Tango in Paris and Mickey Rourke in The Wrestler) is let down by a weak supporting cast: the novice Dmitry Medvedev forgettably plays his democratic understudy, while Mikhail Prokhorov is unconvincing as Putin’s potential liberal rival for the future presidency.

Director: Vladislav Surkov. Total potential running time: 24 years

THE DAMNED UNITED RUSSIA

Formerly undefeated United Russia have hit a brick wall. Despite all-star players and fearsome all-powerful coach, the team is torn apart by a crisis of confidence ahead of a decisive championship game. They’ve sat at the top of the table for too long and got too complacent with the fans, who are now defecting en masse. Rattled by narrow defeats at the hands of hardscrabble underdogs Khimky Forest and Rospil Rangers’ rising striker Alexei Navalny, United Russia’s coaches crack under pressure and decide to fix the decisive match. But they are still unprepared for the force of the opposition. Booed by their own supporters, United Russia achieve an ignominious draw despite imprisoning key opposing players, bribing the ref, hiring an army of football hooligans, stuffing the goals with extra balls and fielding 13 players instead of 11. As a result, United Russia get relegated. A haunting tale of hubris and megalomaniacal self-destruction.

In cinemas until early 2012 at the latest.

THE BRICFAST CLUB

This stereotype-busting drama follows five adolescent countries experiencing an unlikely bonding experience while in detention away from the “developed world economy”. At first glance, Brazil, Russia, India, China and South Africa seem to have nothing in common. But over the course of several summits, they realize that in fact, they all share extraordinary levels of corruption and inequality.

As the heady coming of age story unfolds, former foes Brazil, India and China bond over their young educated population and breakneck economic dynamism. Feeling out of place due to their negligible productive and high tech sectors, Russia and South Africa instead develop a stirring romance based on their populism, single party statehood, rent-seeking and passion for using commodity profits to fund political clientalism. In a saccharine finale that stretches credulity, Russia celebrates entry into the WTO despite the fact that it will likely hurt its competitiveness even further.

OLIGARCH TWIST

“Please sir, can I have some more?” That old chestnut is given a new lease on life by Boris Berezovsky’s bravura performance as Oligarch Twist, an orphaned Russian bobber baron who, fallen on hard times in Dickensian Knightsbridge, hands a writ demanding billions more dollars from his former partner Roman Abramovich. From his London poorhouse (Dolce and Gabbana on Bond St.), little Twist spots the reclusive and monosyllabic Mr Roman marching into opulent Hermes next door. Slipping in through the legs of Roman’s private legion, Boris delivers the fateful line before slapping Mr Roman with a court appointment. The second half of the film veers away from feel good musical and becomes a tense courtroom drama as Twist, a thief with nothing left to lose, lifts the curtain on a decade long web of deceit, plunder and political corruption. As documents are revealed that could have the power to bring down Mr Roman and his cronies, what’s really on trial is no less than the entire history of 90s Russia and the inner circle of the ruling regime.

In broken English with Russian subtitles. Memorable quotes from Abramovich: “Da”.

GRUNT: LOST IN SPACE

15 years and $170 million in the making, this eagerly awaited big budget scifi thriller describes an audacious attempt to land a spaceship – presciently named Grunt, or Ground – on one of Mars’s moons. Yet what could have been another conventional spacefilm (or even porn-film, given the title) is redeemed by a decidedly Russian twist: with just hours to launch, the engineers discover an electrical wiring issue and, instead of postponing liftoff, decide to fix the wire and glue it all back together using a can opener and a tube of Elmer’s. But then the unthinkable happens: as the jerry-rigged seal sheared off by the heat of the launch, the turbo boosters fail to detach, the entire probe is sent into a collision with Earth, and the Americans end up getting to the red planet first.

Available on Glue-Ray DVD.

MARS 500: SPACE MODESTY

This low-budget arthouse sequel to Grunt: Lost in Space proves that Russia remains more than capable of first-class space exploration, as long as it doesn’t involve actually going into space. Inspired by Vladimir Putin’s hit reality show Big Brother, the entire film takes place inside a capsule where six men are constantly filmed sitting in close proximity, playing card games and eating out of toothpaste tubes. Shot in realtime at a disused warehouse outside Moscow using just a portacabin, some ikea furniture, and a couple of two way radios with voice delay, this meditative psychodrama marries the breakneck pacing of Antonioni with the cutting edge special effects of Thunderbirds and Team America: World Police.

Russian-EU co-production. Estimated sitting time: 12 months. Rated PG13 for non-explicit scenes of simulated space flight.

ROMAN HOLIDAY

(Russian title: LUNA PARK)

Roman Abramovich goes on holiday to Italy and ruins everyone else’s by parking Luna, his obscenely huge yacht, in the centre of town, thereby totally eclipsing the historic view.

Dishonourable Mention at Venice Binneale, 2011.

DEAD DESPOTS SOCIETY

“No matter what anybody tells you, words and ideas can’t change the world!” With those rousing words, maverick Professor Vladimir Puting courageously stands up to the prevailing revolutionary winds sweeping the world, in favour of the geopolitical status quo. Advising his friends Gaddafi and Assad to carpe diem in dealing with the protesters while he stalls the international community’s efforts, the inspirational teacher inspires his friends through thick and thin. Yet for all his troubles, in the end, Puting remains all alone. Gaddafi and Kim Jong Il are feeding the daffodils. Kazakhstan teeters on the edge. Castro is on his last legs. Chavez is unwell. One day, Assad too will fall.

Viewers are advised to bring hankies (in case of tear gas).

Nostalgia hits all of us at one time or another. The idyllic past becomes a refuge from the hectic present, a sort of an emotional safety valve; a blissful state of mind, which resides in distant memories. And the mind itself seemingly having this wonderfully therapeutic capability of filtering out all that is sad and leaving us only joyful reminiscences …

Normally it is the time one spends in college which holds the most beautiful memories. In my case, it is my professional firm which has a solid grip on my imagination. For years now any CV brought to my notice bearing the words PricewaterhouseCoopers gets extra attention, but one with the magic words A. F. Fergusons wins a guaranteed interview. And the memories always come flooding back.

My four years at F.C College had coincided, unfortunately, with the most repressive and brutal period of Zia’s regime. Given a free hand by the martial law establishment, the Jamiyat ran amok in the college and terrorized all those who dared standup to its regressive agenda. I saw Christian teachers humiliated, students beaten up and systematic vicious repression of any sort of free speech or thought. The only good experience I had during that period was my involvement with a number of the college sports teams.

After graduating, opting for a career as a chartered accountant was a very natural choice. My father was one, and growing up I had heard of a number of his friends who were in senior positions in the profession. He was especially fond of his squash partner in London, Safdar Saleem, who later on worked for Fergusons, and was very upset when he tragically died at a relatively young age.

My batting average for the college cricket team being considerably higher than my graduation marks percentage, I was pessimistic about getting accepted by Fergusons. My father leveraged his friendships and got me an entrance test appointment. I am sure his being the head of finance at WAPDA also helped. I topped the entrance test, remained coherent during the interview and AFF accepted me.

I still remember reporting for my first day at work. Entering the office I saw the wooden sign board for the partner and managers and noticed that all the names there started with an ‘s’: Sohail Hassan, Shahzad Hussain, Saad Bin Khalid, Sikander Gulzar and Shabbar Zaidi …

What struck me in those early days was the easy-going manner in which various firm members interacted with each other. While there was a great deal of respect for the management there was not even a hint of undue formality in any aspect of the professional relationship. A great deal of credit for this went to the mangers, specially Shahzad Hussain and Shabbar Zaidi, who had enough confidence in their professional and personal abilities to maintain a very cordial work environment.

Having endured very stifling college years this was pure manna for me.

AFF during my years there remained a bit like Italy during the renaissance. Work was something which though taken very seriously on a professional level was only one aspect of our existence in the firm. We had an outstanding cricket team, winning almost all of our matches; an in-house magazine, Meridian, which always had the most wonderful articles; and then there was our pride and joy, the “holy scriptures society”.

Membership to the “holy scriptures society” was strictly by invitation, restricted to gentleman of discerning taste having the right family background , and required suitable monitory contribution, in advance. The principal activity consisted in admiring, in printed form, a certain talent that would be grounds for a treason case in lower Court if recent incidents are to be trusted, if you know what I mean.

We had a number of unique individuals among the support staff: Noor Elahi, the doyen of our office peon, who knew where each audit file was located, and Khokar, the lead typist, who could quality check reports better than most of us. The most beloved staff member was our receptionist who knew every clients’ and numerous sweethearts’ numbers by heart. More importantly, she knew the best time to call.

Then there was the presence of our female colleagues, who were always treated with the utmost respect and dignity. The only problem being that the hall would go silent in their presence as polite conversation was an alien art to most of us.

But the most enduring memory of AFF will always be the refreshingly casual, yet thoroughly professional, manner in which the affairs of the firm were run. To use an accounting cliché, if ever there was a business which focused on the substance rather than form it was AFF. Granting its members a wide latitude, and trusting their competence and maturity, it instilled a sense of responsibility in all of us.

To an uninformed outsider this amount of leeway would be astonishing. Throughout my tenure the formal supervision modes would number precisely two: the monthly worksheet, without which we were not paid our stipend, and then the Sunday attendance, conducted by our then senior manager, now partner, on a huge blue register.

But then our side of the bargain was that each one of us had to live up to the high standards expected from us. And the peer pressure was immense. These two coupled together tended to bring out the best out of most of us by leveraging our talents and energy in a very constructive manner.

Having being part of many world class organizations since, I would rate AFF among the very best in terms of matching people development objectives with work demands.

So many cherished memories, outstanding people, friends for life. We can only be thankful to that old firm. Somehow through all the apparent madness of its methods it chiseled off the rough edges, made true professionals out of us, and in the process seduced us for life…

Can they stabilize the national debt? It's about growth, stupid!

The debt dynamics equation was in the past of interest only to sovereign credit analysts (such as this blogger) and macro policy wonks.  Now, more people want to know about it.  You can generate such an equation that is elaborate or not, but the gist is the following:  The primary budget surplus, that is, government revenues minus expenditures — not including interest expenses and earnings, must be large enough to cover the excess of the interest cost on the national debt over GDP growth, or else the debt to GDP ratio will rise. 

Primary surplus/GDP > Debt/GDP x (r – g)

…where r is the interest rate on the government debt and g is the rate of growth in GDP; r and g are either both expressed in real (inflation-adjusted) or nominal terms.

Many countries today have primary budget deficits, which means, unless GDP growth is stupendous, that is, in excess of the interest rate, then their debt to GDP is going to rise.

The debt to GDP ratio is a comparative measure of a country’s debt burden.  Think of it this way — you have the amount of debt your government owes, and you divide it by GDP, which is a measure of the size of the economy.  GDP, you may recall, is defined as the sum of the transactions (buying and selling) taking place in an economy in a given year.  Debt is divided by GDP in order to measure the capacity of a country to handle its debt burden, because, after all, you could tax all those transactions in order to pay off the debt. 

What the debt to GDP ratio does not tell you is how high taxes are.  For example, in Sweden tax revenues (broadly defined) represent a whopping 52% of GDP; whereas in the US and Japan, they represent only 32% fo GDP.  If you believe that high taxes squelch growth — and you don’t have to be in the Tea Party to do so — then you would be more optimistic about growth prospects in the US and Japan than in Scandinavia.

Now, it just so happens that Sweden’s GDP growth rate has not been consistently lower than that of the US or Japan in recent years; but you might think that over time, if US and Japanese politicians would stop ruining investor confidence with their antics, then these countries could grow more rapidly than Sweden.  Furthermore, both the US and Japan, again if their politicians would behave better (and here you can blame the Tea Party), have greater scope to raise taxes to improve debt dynamics than does Sweden.  It has been estimated that Japan, if it had a VAT tax as high as Europe’s, would balance its budget overnight.

So, growth matters, taxes matter, the interest rate matters, and the budget deficit matters. So, how do some of the sovereigns we see flash across our computer screens fare on the debt dynamics equation?  

Even though Italy has a high debt to GDP ratio of 120%, analysts and euro-officials trumpet the country’s primary budget surplus as an argument for why the government is solvent.  Well, that surplus has been squeezed down to near zero; and, given rising interest rates resulting from the euro zone crisis, an abysmal GDP growth record and poor growth prospects, the primary surplus would need to be between 1.5% and over 4% of GDP in order to stabilize government debt.  Hence, the market’s concern about Italy.

Spain has a much lower debt to GDP ratio than Italy, at just over 60%; however, its primary balance is in deficit of about 4% of GDP.  Yet Spain only needs its primary balance to be in balance, not surplus, to stabilize its debt to GDP ratio.  But closing that 4% gap is still quite a feat.  The new right of center government, with its majority in the legislature, may just be able to do this.  But the market still has its doubts.

How about France, which the rating agencies still have at AAA but have placed on a negative outlook? Its primary balance is in deficit like Spain’s, but only to the tune of 2.5% of GDP.  Yet its debt burden is higher, at 85% of GDP.  France too needs a primary balance that is in balance, but has less distance to go than Spain.  Still worries about France’s growth prospects — especially its international competitiveness — plague the markets. 

And then there is Germany, which has a sizable government debt burden of close to 80% of GDP, worse than Spain’s. Those pesky German states (lander) love to borrow.  Germany too requires a primary balance to stabilize government debt, but AAA Germany’s primary balance is currently nearly in balance, and its GDP growth track record has been impressive of late.  We’ll see if that continues.

The problem here is growth, stupid!  With high tax burdens, an ideological vice grip on the ECB, poor political leadership at the European and national levels, a lack of structural reforms, and a currency in grave doubt, prospects for GDP growth in the euro zone that would support virtuous debt dynamics are dim.

The UK, which thumbed its nose at greater European oversight of its budget, has a primary deficit of 3.5%, debt to GDP like France’s, and requires balance in order to stabilize government debt.  Yet the UK has the flexibility of its exchange rate and monetary policy to support GDP growth, which euro zone countries lack; however, the UK sends 40% of its exports to the euro zone, so its “splendid isolation” is a mere pipe dream.

Leaving the shores of Europe, we find the US and Japan with woeful primary deficits of 6% and 8% of GDP respectively, suggesting explosive deterioration in sovereign debt dynamics.  US debt to GDP is approaching 95% this year, and Japan’s, get ready for this, is crossing 225% of GDP!  However, given very, very low interest rates in both countries — how long they can get away with this is another story, but most believe they have at least a few years — and possibly better growth prospects than in Europe, both the US and Japan can stabilize government debt with a primary deficit of 1% or so of GDP. 

Japan of course needs much more than debt stabilization; it needs sharp debt reduction.  The other side of the coin for Japan and the US (and to a lesser extent the UK, where tax revenues represent around 40% of GDP, lower than most European countries) is that, should the Tea Party in the US and the factions in the Japanese diet allow some tax increase, then these countries could dramatically improve their debt dynamics.  Europe, on the other hand, can’t really afford to raise taxes, even though some countries are going ahead and doing it anyway.

Christmas trees instead of cars. Yeah.

We’re not exactly into the whole commercial holiday scene but it seemed like a good time to get a little tree to decorate for the season and put out to grow for the rest of the year. So we got ourselves to Ricky’s Flower Market. We’d often passed this inviting looking urban nursery, bursting with flowers and potted plants in warmer weather, incongruously tucked between two heavily trafficked roads at Union Square, Somerville, MA. Now it’s full of Christmas trees. We pulled into the parking spot (bonus) and after some deliberation and discussion with Ricky, the owner, chose a sweet little Dwarf Alberta Spruce (a hardy species indigenous to the New England and Canada area, we learnt), in a pot. Here’s part of our conversation with its surprise tidbits:

Me: How long have you had this place here?

Ricky: Guess.

Me: Oh, I don’t now. 50 years? 100 years?

Ricky: (letting out a big guffaw) Do I look that old? Oh I wish I was that old and felt this young!

Me: Err… no, but it could have been started by your father or grandfather.

Ricky: I started it. I started it 22 years ago. A good ol’ Italian boy. My ancestors were from the northern part of Italy, the part known as the bread basket of the region. They were food growers. (Would never have guessed given the very New England accent… “the paHt known as…”)

Aun: You converted it from a gas station? (Observant man. I hadn’t noticed. Duuuh.)

Ricky: That’s right. Better green than gas stations! Better for the environment, better for everyone!

“I’ve been coming here since this was a gas station. That’s how long I’ve been coming here,” chipped in a woman, holding a pine wreath. “And now I come here to get all this. Much better!”

Would he manage to sell all those Christmas trees before December 25th, I wondered.

A big grin. “You bet! That’s what we’re here for.”

Would he be able to get our Alberta Spruce to the caH, Aun asked. He flexed his muscles and grinned. The tree fitted in the car trunk. It looks great by our bay window, just for a couple of weeks until we put it outside to grow.

Thanks Ricky DiGiovanni!

What's Next, Prime Minister? — From The Evening Standard, London

At least 23 and perhaps as many as 26 of the 27 members of the European Union have agreed to an inter-governmental agreement that may or may not save the euro from the bond market vigilantes. A full-blown treaty failed because there was not unanimous support for the idea – Britain stood alone in saying flat out that it wasn’t signing up for that. Prime Minister Cameron had little choice either on the grounds of national interests or domestic politics. However, the EU is a much different place than it was just last week.

Mr. Cameron went to Brussels demanding that the UK have a veto over any financial services regulations. While this may seem a bit extreme, one must remember that France and Italy have protected their farming sector with the EU’s Common Agricultural Policy for decades. And the euro’s greatest benefit to Germany was the protection of its neighboring export markets – a single currency ensured that German manufactured goods were still relatively affordable outside Germany, the Low Countries and Scandinavia. Britain simply wanted to protect the 10% of its GDP that comes from financial activity.

President Sarkozy of France explained why he could not accept that, saying “You cannot have an opt-out and then ask to participate in all the discussion about the euro that you did not want to have, and which you also criticized.” His European policy has always been to form a core group within Europe that excludes the more free-market British, Scandinavians and Eastern Europeans – this will maximize French power.

The details of the “fiscal compact” are pretty clear. The BBC reported them as “a cap of 0.5% of GDP on countries’ annual structural deficits, ‘automatic consequences’ for countries whose public deficit exceeds 3% of GDP; the tighter rules to be enshrined in countries’ constitutions; European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012 adequacy of 500bn-euro (£427bn; $666bn) limit for ESM to be reassessed; Eurozone and other EU countries to provide up to 200bn euros to the IMF to help debt-stricken eurozone members.”

The agreement itself is far less important than Britain’s position in the EU. As the Economist noted, “Whether the agreement does anything to stabilise the euro is moot. The agreement is heavily tilted towards budget discipline and austerity. It does little to generate money in the short term to arrest the run on sovereigns, nor does it provide a longer-term perspective of jointly-issued bonds. Much will depend on how the European Central Bank responds in the coming days and weeks.”

Frankly, I don’t think it will work in the long-term. Greater austerity is not going to get the Greek or Portuguese economies growing anytime soon, but Hoover’s ghost haunts the eurozone now. And as a result, saving the whole thing is going to cost Germany more in the end than it would have a year or more ago.

Instead, Britain now finds itself alone on matters of budgeting and taxation within the EU. The 17 eurozone members and at least six others will be part of the inter-governmental agreement (just shy of a treaty in international legal terms), and Sweden, Hungary and the Czech Republic may sign up to it after parliamentary debates.

Why was Mr. Cameron so uncooperative? Quite simply because he had no choice. As noted, 10% of the UK’s GDP is finance based. Moreover, though, he leads a coalition that ranges from Conservatives who still think of Europe as the enemy, Conservatives who are tolerant of the EU’s existence, and Liberal-Democrats who are rabidly pro-Europe. His room for maneuver was very small, and his margin of error even smaller.

No matter what he did, he risked splitting these various factions. By vetoing a new treaty, he opted to distance the Conservative Party from the junior coalition Liberal Democrats. Not only is he Prime Minister, he is also leader of the Conservatives, so this should come as no surprise.

For their part, the Liberal Democrats are putting a brave face on it, but there is a clear sense that they know their policies have suffered a huge, perhaps lethal, setback. Leader of the LibDems and Deputy Prime Minister Nick Clegg initially put the blame on the French and Germans rather than on Mr. Cameron. However, he has made it clear that he doesn’t like the result no matter who is to blame. He said on the Andrew Marr program on the BBC, “I’m bitterly disappointed by the outcome of last week’s summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union. I don’t think that’s good for jobs, in the City [the UK's financial district] or elsewhere, I don’t think it’s good for growth or for families up and down the country.” Since then, he has been more vocal in his protests.

Less diplomatic were statements from LibDem bigwigs Lords Oakeshott and Ashdown. Lord Oakeshott stated on the record that LibDem Business Secretary Vince Cable had “given a very serious warning last Monday in the cabinet against elevating these financial regulation points into a make or break deal.” Former leader of the LibDems, Lord Ashdown, put it in the blunt terms of the special forces soldier he once was stating that the veto “tipped 38 years of British foreign policy down the drain.”

Where does all this leave us? The British governing coalition is clearly divided and may not survive the remaining three-and-a-half years this parliament has to run. Europe will move forward toward fiscal union, but without the UK. Moreover the other 9 EU members that aren’t part of the eurozone may discover that having Brussels handle their economic policy to suit German and French desires is less than appealing. There will be legal battles over the use of EU-wide institutions to enforce rules that do not apply to the entire EU. And in the end, the problem of heavily indebted countries failing to achieve meaningful economic growth remains the central issue in European finance.

2011 can’t end soon enough.