Archive for the ‘BUSSINESS & ECONOMIC’ Category

The Real Threat From China

July 6, 2009

Over the past decade, people have often asked me the question – where is the next India? A question relating to the next major IT off-shoring destination. The general sense in India is that this is largely a settled question and there is no major emerging competitor to India. While India has some huge advantages over other countries, I believe there is a real threat to India’s dominance in IT, and it comes from a not so distant neighbor – China. Here are the reasons why:

There are three factors that intersect to create large IT off shoring destinations–labor supply, quality and cost. Let us compare China and India on each factor:

Labor Supply: Major off-shoring hubs require huge talent pools. The problem with locations that have limited talent pools is that capacity quickly gets overtaken by demand and wages rise rapidly. Simply observe what happened in Ireland in the late 1990’s and the Chezk Republic earlier this decade. Companies were attracted to the highly skilled, lower cost talent in these countries, but saw wages increase sharply in a matter of years as there was not a large and growing pool of talent. In countries with huge IT talent pools, the supply of talent keeps wage inflation at bay. India and China are the only two competitive countries concerning this factor. And today China is producing more IT graduates each year than India. Essentially, Advantage China.

Labor Quality: This is where the general consensus is India has an unbeatable advantage. Especially when it comes to English speakers. India does have a strong advantage here, but you cannot count out the Chinese. They have made fundamental changes to their education system, making English language studies compulsory starting at the elementary school level. I was in China recently and met with many university students. I noticed a dramatic improvement in their English communication from just a few years ago.

There is also another critical issue. Many outsourcing companies are talking about diversifying their businesses away from the US to Europe and Asia. If a shift in this direction occurs, English dominance will become less relevant. In fact when it comes to competing for outsourcing work in Asia (Japan, Korea, Taiwan)China actually has a language advantage over India. So, when it comes to labor quality, today India has the advantage, but we need to keep a close watch for potential changes.

Cost: Most cost comparisons to-date revolve around wages – where India has historically held an advantage. However, the wage gap between India and China has been dwindling because of massive wage inflation in India. But experienced outsourcing companies are beginning to look at other major costs, such as infrastructure and taxes in addition to wages. The Indian government has fueled the growth in the IT industry by providing all IT companies with a tax holiday for the past ten years. This is now expiring. Interestingly, at the same time, local provincial governments in China are expanding their tax benefit programs for companies setting up large outsourcing centers.

The other major cost is infrastructure. Here, China has a huge advantage. The infrastructure costs in India are large – both monetarily and operationally. As an example, companies have to provide transportation to employees because public transportation is not available. IT companies are running huge transportation businesses instead of focusing on their core business. Sohistorically India has held the advantage on cost, but China is slowly gaining the upper hand.

So what does all this mean? I believe China will most likely emerge as a major IT outsourcing hub. I also believe the overall growth in the industry can support the development of another major off-shoring hub. Further more, this can be an opportunity for Indian companies to embrace China, diversify their own operations, and expand their presence in China.

There is a historical context here. The US lost the manufacturing market because they failed to take the threat from Japan and other low cost countries seriously. When it came to IT off-shoring the major US companies were much more nimble –embracing off-shoring and India. Just look at how quickly companies like Accenture and IBM have developed their global sourcing capabilities.

The life history of Barac obama

June 27, 2009

Barrack obama was born in the year of 4 August 1961, Honolulu, Hawaii, USA .His name was Barrack Hussein Obama Jr,the nick name was Barry Bama Rock .His height is6′ 1½” (1.87 m). Barack Obama was born to a white American mother, Ann Dunham, and a black Kenyan father, Barack Obama, Sr., who were both young college students at the University of Hawaii. When his father left for Harvard, she and Barack stayed behind, and his father ultimately returned alone to Kenya, where he worked as a government economist. Barack’s mother remarried an Indonesian oil manager and moved to Jakarta when Barack was six. He later recounted Indonesia as simultaneously lush and a harrowing exposure to tropical poverty. He returned to Hawaii, where he was brought up largely by his grandparents. The family lived in a small apartment – his grandfather was a furniture salesman and an unsuccessful insurance agent and his grandmother worked in a bank – but Barack managed to get into Punahou School, Hawaii’s top prep academy. His father wrote to him regularly but, though he traveled around the world on official business for Kenya, he visited only once, when Barack was ten.

Obama’s mother, Ann Dunham, grew up in Wichita, Kansas. Her father worked on oil rigs during the Depression. After the Japanese attack on Pearl Harbor, he signed up for service in World War II and marched across Europe in Patton’s army. Dunham’s mother went to work on a bomber assembly line. After the war, they studied on the G. I. Bill, bought a house through the Federal Housing Program, and moved to Hawaii.Meantime, Barack’s father had won a scholarship that allowed him to leave Kenya pursue his dreams in Hawaii. At the time of his birth, Obama’s parents were students at the East–West Center of the University of Hawaii at Manoa.Obama’s parents separated when he was two years old and later divorced. Obama’s father went to Harvard to pursue Ph. D. studies and then returned to Kenya.

His mother married Lolo Soetoro, another East–West Center student from Indonesia. In 1967, the family moved to Jakarta, where Obama’s half-sister Maya Soetoro–Ng was born. Obama attended schools in Jakarta, where classes were taught in the Indonesian language.Four years later when Barack (commonly known throughout his early years as “Barry”) was ten, he returned to Hawaii to live with his maternal grandparents, Madelyn and Stanley Dunham, and later his mother (who died of ovarian cancer in 1995).He was enrolled in the fifth grade at the esteemed Punahou Academy, graduating with honors in 1979. He was only one of three black students at the school. This is where Obama first became conscious of racism and what it meant to be an African–American.

440px-Official_portrait_of_Barack_Obama

In his memoir, Obama described how he struggled to reconcile social perceptions of his multiracial heritage. He saw his biological father (who died in a 1982 car accident) only once (in 1971) after his parents divorced. And he admitted using alcohol, marijuana and cocaine during his teenage years.

Barack Obama has admitted that he struggled through his initial childhood years to find answers about his multicultural, multi racial heritage. As a very small child he found difficult to accept such vast differences between his mother and fathers skin color. In his own words he says that he had a middle class upbringing. During his teenage years, he even used cocaine, marijuana and alcohol to deal with his internal conflicts, something which he regretted later. Now, he thinks it was a big mistake and he was morally wrong. He never touched illegal drugs again after those years.After high school, Barack moved to Los Angeles and studied at the Occidental College for two years; from there to Columbia College in New York. He majored in Political Science with specialization in International relations in 1983. In the meantime his father had died in Kenya in 1982. Barack Obama moved to Chicago after spending four years in New York and working at Business International Corporation and New York Public Interest Research Group (NYPIRG). He was hired as Community organizer by Developing Communities Project, a church based community organization. The organization wanted a young black man to help them collaborate with black churches in the south side. From 1985 to 1988, Obama worked there as Director of the organization. He helped blacks fight for their rights from the city government. He worked to improve the living conditions of poor neighborhoods which faced crimes unemployment. Working in a small organization taught him organizational skills. He was always good with words and was known for making speeches which people could emotionally connect to. He worked with Saul Alinsky whose method was agitation which meant getting people angry enough about their current state of things that they are compelled to take some step and do something. During his tenure at Developing Communities Project, the staff at this organization grew from 1 to 13 and so did their budget. Then, he worked as consultant and instructor for Gamaliel Foundation, a community organizing institute. It was 1988 when we first traveled to Europe and then to Kenya for few weeks, where he met his fathers family for the first time.

Barack Obama felt that law was a medium which could facilitate activism and community organization. So in late 1988, he entered Harvard Law School. In his second year at college, in 1990, he was elected as the president of law review. This role required him to be editor- in-chief and supervisor of law review staff of about 80 editors. As he was the first black to be elected for this position, it was a widely reported and much publicized event. It had taken Obama long sessions of discussion with conservatives to support him. While still in law school in 1989, he worked as an associate at Sidley and Austin law firms. He met his future wife Michelle, also a lawyer, here. Newton Minnow was a managing partner here. Minnow, later introduced him to many of the Chicago top leaders. In the summer of 1990, he worked at Hopkins and Sutter and finally graduated from Harvard in 1991; after which he again moved back to Chicago where he practiced as a civil rights lawyer. His could have easily taken up a god job after Harvard but his values and mothers teachings had taught him to do something for the society and the less privileged ones. The publicity that he garnered at Harvard, because of his election as first black president of Harvard law review, led him to an offer by University of Chicago law school to write book on racial relations. He was offered a fellowship from the university and an office from where he could write the book. In the meantime, after dating for few years and being engaged for a year, Barack married Michelle Robinson in 1992. Obama initially thought he would complete the book in one year but it took much longer as it was a memoir and he included bits about his personal life also. He traveled to Bali with his wife and wrote most of the part of the book there. In mid 1995, the manuscript was published. Book was named Dreams From My Father: A Story of Race and Inheritance. Few months after this publication his mother Ann, who had moved to Hawaii from Indonesia in 1994, died of ovarian and uterine cancer. He won the Grammy award for the audio version of this book.

barack-hussein-obama

Meanwhile, Barack Obama also taught Constitutional Law at University of Chicago Law School from 1992- 2004; first as a Lecturer from 1992 to 1996 and then as Senior Lecturer from 1996 to 2004. Barack had also joined Davis, Miner, Barnhill and Galland law firm as civil rights attorney. He was an Associate in this law firm from 1993 to 1996 and then counsel from 1996 to 2004. Barack served on the board of Directors Woods Fund of Chicago, Joyce foundation form 1994 to 2002. In 1992, he became the founding member of board of director of Public Allies but resigned in 1993 and his wife joined it. All these years in Chicago, he served on board of directors of Chicago Annenberg Challenge, Chicago lawyers Committee for Civil Right under Law, the Centre for Neighborhood Technology and Lugenia Burns Hope Center.

In 1992 election he had organized largest voter registration drives, Project Vote, in history of Chicago from April to October 1992. He had with him a staff of ten and around seven hundred volunteers. They had the goal of registering around 150,000 African Americans in the state who were unregistered. It was one of the most successful voter registration drives one had ever seen. Baracks work led him to run for Illinois State Senate. Eventually, he was elected in 1996 November, succeeding State Senator Alice Palmer, as Barack Obama was the only candidate left, after rest of the petitions were invalidated. He strongly worked for ethics reforms and criminal justice reform. In 1998, Barack with U.S. senator Paul Simon passed the toughest campaign finance law. It called for banning any personal use of the campaign money and any gifts received from the lobbyists. Before the law was passed, Illinois was among the worst states for campaign finance regulations.

He went on to serve three terms in the Illinois State Senate, from the year 1997 to 2004. Barack lost a primary run for U.S. House of Representatives to Bobby Rush in a very close fight in the year 2000. In the year 2003, he passed legislation to expand healthcare coverage to 70,000 children making Kidcare, state Childrens Health insurance program, permanent. The legislation also extended health insurance to uninsured parents, which added up to additional 84,000 parents. After he found there were 13 innocent death row inmates, Barrack saw to it that death penalty reforms were changed. Also, Illinois became the first state where videotaping an interrogation became mandatory. Even Law enforcement agreed that recording questioning would help the prosecutions chances. As the Chairman of Illinois Senates Health and Human Services Committee, Barack Obama unanimously led a legislation to be passed on racial profiling by the police, which means maintaining records of the race, age and gender of the drivers detained. For low income families, Obama created Illinois Earned Income tax credit which offered tax relief.

Barack Obama came into national limelight with an inspiring speech at July 2004 Democratic National Convention where he spoke against the Bush administrations policies on Iraq war. His speech was the highlight of the convention and people who saw it knew that he was an emerging star. Barrack is a great orator, at par with Martin Luther King Jr. and often compared with John F Kennedy. People wait for hours to hear him speak. During his presidential campaign he drew huge crowd. He has a flair for consensus building and he loves addressing crowds. His wife Michelle Robinson is a Harvard Law School graduate. Michelle and Barack had their first daughter, Malia Ann in 1998 and second daughter Natasha, known as Sasha in 2001. His second book, Audacity of Hope: Thoughts on Reclaiming the American Dream was out in October 2006 and he won the Grammy for Best Spoken Word Album for audio version of this book too. As a writer, Barack is very talented and is an introspective writer. Barack is a devoted basketball player and a Chicago White Sox and Chicago Bears fan. Though his father was brought up with Islamic faith, he was an atheist by choice, however, Barack follows Christianity.

By middle of 2002, he started thinking about running for U.S. Senate and formally, announced his candidacy in 2003 for U.S. Senate. On 2nd November 2004, he won the election by a great victory margin and was finally, elected to the US Senate, following which he resigned from Illinois State Senate. Barack Obama became the fifth African American senator in the history to do so. Till 2006, Obama held minority appointments like Foreign relations, Environment and Public Works, Veterans Affairs on Senate committees. He took additional major assignments of Committee of Health, Education, Labor and Pensions and Committee on Homeland Security and Government Affairs at the start of 2007. While in U.S. Senate Foreign relations Committee, Barack visited Iraq to witness the war. In January he even introduced a legislation to end the Iraq war. He went against the conventional thinking of U.S. and had the courage to oppose the war. He also traveled to Russia and Africa. Right through his career he has spoken about his opposition to the Iraq war and to providing universal health care, which he focused on even in the presidential campaign. Obama made efforts to correct the disparity that existed in the state of Illinois where veterans were receiving less disability benefits as compared to other states. As a result more disability claims specialists were hired for the regional office in Chicago and claims of veterans were re-examined. Education was his top priority during his Senate years. He passed a legislation to carry summer education programs which emphasize mathematics and problem solving skills. He worked on to get black colleges eligible for grant money.
Quick summary of Barack Obama’s Life:

1961 – Barack Obama is born in Honolulu, HI.

1968 – Obama and his mother move to Indonesia for 5 years.

1971 – Obama moves back to Honolulu, HI. to live with his grandparents. He starts 5th grade at Punahou School.

1979 – Barack Obama graduates from Punahou School and spends two years at Occidental College.

1981 – Obama transfers to Columbia University.

1983 – Graduates from Columvia University and works at Business Int’l Corporation for a year.

1985 – Moves to Chicago and becomes the director of Developing Communities for 3 years.

1988 – Starts studying at Harvard Law School.

1992 – Obama works as the executive directory of Project Vote and Marries Michelle Robinson

1993 – Begins working as an Attorney at Miner, Barnhill & Galland and is the senior lecturer at the University of Chicago.

1995 – Publishes his first book “Dreams Of My Father”

1996 – Elected into the Illinois State Senate.

1998 – Re-Elected into the Illinois State Senate.

1999 – His first daughter, Malia, is born.

2000 – Challenges Congressman Bobby Rush but was defeated in the Primary.

2001 – His second daughter, Sasha, is born.

2004 – Gives the keynote address at the 2004 DNC convention after defeating Alan Keyes.

2006 – Publishes his second book “The Audacity Of Hope”

2006 – Announces that he will seek the 2008 Democratic party nomination.

2008 – Wins the Iowa caucus.

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Vodafone launches signal booster

June 24, 2009

Vodafone is to start selling hardware that makes it easier to use a mobile in the home. The box known as a femtocell is essentially a tiny base station that boosts mobile signals within the home. The hardware, which Vodafone has dubbed the Access Gateway, routes calls across a broadband connection.

The Access Gateway will go on sale on 1 July for a one-off purchase of £160, a monthly charge of £5 or as part of a £15 per month mobile deal. The device can support up to four calls at a time and works with any third-generation (3G) phone. Vodafone said it had been trialing the technology for six months before taking the decision to launch the service. Those signing up will have to register which phones will be routing calls via the gadget.

3g Iphone

There’s a service imperative where people are using mobiles at home more and more in terms of signal quality around the house and through the walls of building,” said Nigel Toon, head of femtocell chip maker Pico chip. “There are definitely some challenges there. Mr. Toon said femtocell would also prove useful as operators extended the range of services they were offering and worked to cope with the growth of mobile broadband. Data use on mobiles is projected to grow enormously Toon but operators would not be able to put up more base stations to cope with usage. To handle that the carriers have to have a lot more capacity in their networks.

China accused for unfair trade

June 24, 2009

The US and European Union (EU) have filed complaints that China is unfairly limiting its raw material exports. In the trade cases filed with the World Trade Organization (WTO) the US and EU said China was giving its domestic industry access to cheap materials. China said it was meeting its WTO obligations and would contest the case. The case may be the first of many between the world’s largest nations as countries have sought to protect their industries amid the global recession. The cases concern the export of materials such as coke used to make steel, for which it is one of the largest producers, as well as bauxite and magnesium. The United States believes that China is unfairly restricting exports of raw materials US Trade Representative Ron Kirk said.
These actions are hurting American steel, aluminum and chemical manufacturers, among other industries, that desperately need this material to make their products.” Mr. Kirk said the US had decided to pursue a WTO case after two years of talks between the Chinese and the previous administration of former President George W Bush had failed to reach a resolution. China responded that its goal was to protect the environment and natural resources, and the Chinese side considers the relevant policy to be compliant with WTO regulations. China has also responded by launching a complaint over a US ban on the imports of Chinese poultry, which has been in place since the bird flu scare in 2004. The US and EU complaints now trigger a 60-day consultation period. If the dispute is still not resolved, they can formally request a hearing panel, which could hear the case for up to a year. If they win, the US and EU would then be given the go-ahead by the WTO to impose economic sanctions on China.

World hunger hits one billion

June 20, 2009

One billion people throughout the world suffer from hunger, a figure which has increased by 100 million because of the global financial crisis, says the UN.The UN’s Food and Agriculture Organization (FAO) said the figure was a record high. Persistently high food prices have also contributed to the hunger crisis.

The director general of the FAO said the level of hunger, one-sixth of the world’s population, posed a “serious risk” to world peace and security. The UN said almost all of the world’s undernourished live in developing countries, with the most, some 642 million people, living in the Asia-Pacific region. In sub-Saharan Africa, the next worst-hit region, the figure stands at 265 million. Just 15 million people are left hungry in the developed world. “The silent hunger crisis – affecting one-sixth of all of humanity – poses a serious risk for world peace and security,” said Jacques Diouf. “We urgently need to forge a broad consensus on the total and rapid eradication of hunger in the world and to take the necessary actions.” ‘Contradiction’

The increase in the number of hungry people was blamed on lower incomes and increased unemployment, which in turn reduced access to food by the poor, the UN agency said.

But it contrasted sharply with evidence that much of the developed world is richer than ever before.It’s the first time in human history that we have so many hungry people in the world,” said FAO spokesman Kostas Stamoulis, director of the organization’s development department.And that’s a contradiction, because a lot of the world is very rich despite the economic crisis.” Mr. Diouf urged governments to provide development and economic assistance to boost agriculture, particularly by smallholder farmers. Investment in agriculture must be increased because for the majority of poor countries a healthy agricultural sector is essential to overcome poverty and hunger and is a pre-requisite for overall economic growth,” he said.

Urban poor would probably face the most severe problems in coping with the global recession, the UN warned, because lower export demand and reduced foreign investment were more likely to hit urban jobs harder.Many migrants to urban areas would be likely to return to rural areas, it added, transferring the burden.Incomes have also dropped “substantially” in some developing countries where families depend on remittances from relatives working abroad.

With the financial crisis hitting all parts of the world more or less simultaneously, developing countries have less room to adjust, the UN agency says.Food prices among the pressures is the reality that borrowing from international capital markets is more limited” in a global crisis, the FAO said.Food costs in developing countries now seem more expensive, despite prices in world markets declining during the food and fuel crisis of 2006-08, it added.They remained on average 24% higher in real terms by the end of 2008 compared to 2006. For poor consumers, who spend up to 60% of their incomes on staple foods, this means a strong reduction in their effective purchasing power.

Economists see end to US downturn

June 17, 2009

The US economy should emerge from recession by the late summer, according to economists from some of the country’s top banks.The American Bankers Association’s Economic Advisory Committee has said it expects economic activity to increase by 0.5% between July and September.But committee head Bruce Kasman said, “the economy will return to growth [in the quarter] but not to health.”The bankers also said US unemployment would hit 10% early next year.Separately, the secretary-general of the Organisation for Economic Co-operation and Development (OECD) has said that economic recovery within the group’s 30 countries will begin at the end of this year.Speaking in Mexico, Angel Gurria added that the US would be one of the first countries to come out of recession.

Housing recovery: US consumer spending, which accounts for about two-thirds of economic growth in the US, should increase in the second half of the year and help to moderate lay-offs and cuts in investment spending, the Economic Advisory Committee said.Coupled with support from policy stimulus and an improvement in financial market conditions, these developments have made it likely that the overall economy will expand in the second half of the year,” it predicted.Mr Kasman, chief economist for JP Morgan Chase, also said that a recovery in the housing market would be an “important contributor” to economic growth.But he cautioned against too much optimism.Growth in the coming quarters is likely to gather momentum but will not prove sufficiently robust to undo much of the severe damage done to our labour markets and public finances,” he said.This means that growth would not return to “trend pace” until the middle of 2010, he added.For this reason, unemployment would remain at or above 9.5% for the whole of next year.The current unemployment rate in the US is 9.4%, the highest since 1983.

Mixed messages: The US economy contracted by an annual rate of 5.7% in the first three months of 2009.It has shrunk for three consecutive quarters – the first time that has happened since 1975.And recent figures have sent out mixed messages about the timing of any recovery.Earlier on Tuesday, figures showed that the number of new houses being built in the US in May bounced from record lows in April.But separate figures showed that industrial production fell by more than analysts had expected.

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Big economies – G8

June 14, 2009

The world’s largest economies are beginning to stabilize but still face major risks amid an ongoing global recession, G8 finance ministers say. At a meeting in Italy of G8 nations, the ministers said stock markets were rising, interest rates more stable, and consumer confidence was returning. However, US Treasury chief Tim Geithner led warnings that it was too early to wind down economic stimulus packages. He said they should remain in place until a global recovery was under way. At the meeting in Lecce, which aimed to lay the groundwork for a full G8 heads of government conference next month in the earthquake-hit town of L’Aquila, the finance ministers conceded that the global situation “remains uncertain”. “Significant risks remain to economic and financial stability,” the ministers said in a statement released at the end of their meeting. It highlighted the possibility that unemployment could continue to rise even after output growth resumes. But they agreed a joint statement which offered signs of hope after nine months of gloomy economic news. “We have taken forceful and co-coordinated action to stabilize the financial sector and provide stimulus to restore economic growth and there are signs of stabilisation in our economies,” the statement said. Mr Geithner said the “early signs” were encouraging, but injected a note of caution. “The global economy is still operating well below potential and we still face acute challenges,” he said. “I don’t think we’re at the point yet where we can say we have a recovery in place,” Mr. Geithner warned, saying it was “too early” to move away from the interventionist economic policies put in place around the world since the banking crisis of September 2008. UK Chancellor Alistair Darling said Britain’s economic prospects remained linked to those of other G8 nations. “A lot will depend on other countries making progress: on cleaning up their bank balance sheets; volatility in commodity prices, oil for example. So I think there are reasons to be cautious,” he told Reuters news agency. The meeting comes two months after a full G8 heads of government meeting in London agreed to inject billions of dollars into the global economy. Big economies – G8

Child poverty duty to become law

June 12, 2009

Ministers are making it a legal duty for the government, local authorities and other organizations to help to end child poverty across the UK.The government looks set to miss its own targets on cutting the numbers of children living in poverty. A new bill being published later will make it a duty to support families so that child poverty is eradicated by 2020, the goal set by Tony Blair. Campaigners say this means future governments cannot easily drop the aim. The latest figures available, for 2007/8, put the number of children living in poverty at 2.9 million. Poverty in this case is measured relatively – those who live in households with an income of less than 60% of the average. Since Tony Blair set the target of ending child poverty by 2020, the government says it has lifted half a million children out of poverty, down from 3.4 million in 1999. The then prime minister also set a target to halve the numbers of children in poverty by 2010 – but that looks unlikely to be met. Ministers say measures taken since the 2007 Budget will move another 500,000 children out of poverty, but that will still leave 2.4 million in that position.

Strategy: Under the Child Poverty Bill, a legal duty to work together to support families to end child poverty will be placed on central government, councils and services including the police, NHS primary care trusts and youth offending agencies. It requires the Westminster government to publish a UK-wide child poverty strategy, which must be revised every three years. It sets out four targets to be met by 2020 across the UK, which the government says will “define the eradication of poverty”. These include having fewer than 10% of children living in relative low income poverty (i.e. in households with less than 60% of average). The bill will also establish a child poverty commission to advice on strategies to tackle child poverty. The main ways the government tries to move children’s families out of poverty include changes to the tax and benefits system, including tax credits, and a wider approach to raising skills and closing the education achievement gap between rich and poor. Providing better housing and children’s centers such as Sure Start are also part of the drive.

‘Big challenge’

Work and Pensions Secretary Yvette Cooper said: “This bill is about giving every child a fair chance in life. I want a society where children don’t miss out on school trips, aren’t stuck in poor housing with no space to do their homework and aren’t left behind because they don’t have a computer or internet access. This is a big challenge, and one which we will not shy away from. It holds current and future government’s feet to the flames and won’t allow any government to quietly forget about child poverty or walk away.” But Conservative spokeswoman for work and pensions Theresa May said the pledge to halve child poverty by 2010 was “just one of countless Labour promises that lies in tatters”. “It is a tragedy that the number of children falling into the poverty cycle is continuing to rise, she said. The government needs to wake up and get a grip of this problem. Simply relying on means-tested benefits to address the symptoms of poverty is unsustainable. Instead we must tackle the root causes of poverty, such as educational failure, family breakdown, drug abuse, indebtedness and crime.”

The Child Poverty Action Group said the new bill was a “major step in the fight to end Britain’s child poverty shame”. The group’s chief executive, Kate Green said: “You rarely see such high levels of child poverty as we have in the UK in other wealthy countries and that is clearly wrong. We must stop so many of our children growing up with worse health, poor life chances and a lower life expectancy. The bill will mean action on child poverty is no longer optional for future governments, it will be mandatory.”

Obama Overseer to Set Pay at Rescued Companies

June 10, 2009

The Obama administration on Wednesday appointed a compensation czar who will have broad discretion to set the pay for 175 top executives at seven of the nation’s largest companies, which received hundreds of billions of dollars in federal assistance to survive. The mandate given to the new compensation official, Kenneth R. Feinberg, a well-known Washington lawyer, reflects the federal government’s increasingly intrusive role in the corporate affairs of troubled companies. From his nondescript office in Room 1310 of the Treasury building, Mr. Feinberg will set the salaries and bonuses of some of the top executives in America, including Kenneth D. Lewis, the chief executive of Bank of America; Vikram S. Pandit, the head of Citigroup, and Fritz Henderson, the chief executive of General Motors. The compensation of executives at some companies receiving aid provoked a firestorm of political outrage earlier this year. In revising an earlier proposal to set pay limits, the Obama administration has decided to take an approach that will leave the success or failure of the effort to curtail high compensation at the assisted companies in the hands of Mr. Feinberg. (Mr. Feinberg himself will not receive any government compensation.)Instead of deciding compensation levels himself, the Treasury secretary, Timothy F. Geithner, decided to appoint Mr. Feinberg, a well-known mediator whose last high-profile assignment was putting a financial value on the lives of victims of the 9/11 attack, to decide the pay for the top 25 executives at the American International Group,Chrysler, Chry Citibank, sler Credit, General Motors, GMAC and Bank of America. For 80 other financial institutions that have received federal assistance, Mr. Feinberg will develop the overall compensation structure, but without setting the exact level of pay. For these 80 companies, the goal is to reduce excessive risk-taking by executives whose compensation is tied to company performance. Mr. Feinberg will also determine whether it would be in the public interest to force any executives at companies receiving assistance who might have been overpaid to return some pay.Mr. Feinberg became a nationally known figure after he was assigned by the Bush administration to help settle possible lawsuits by the families of victims of the terrorist attacks on Sept. 11, 2001. His job was to put a value on the lives of the victims and offer government settlements to avoid lawsuits. Mr. Feinberg met with many of the families and spoke around the country about how intellectually challenging and emotionally difficult the assignment became. He often sought refuge by cloistering himself in a room in his home to listen to his extensive opera collection.

Before that assignment, he was appointed by federal district judges to help resolve some of the most difficult product liability lawsuits. He played central roles in resolving prominent cases involving victims of asbestos, Agent Orange, and the Dalkon Shield, a birth control device that injured more than 200,000 women. He also was one of three arbitrators who determined the fair market value of the Zapruder film that captured the assassination of President John F. Kennedy, resolving a dispute between the heirs of Abraham Zapruder, who shot the footage, and the government, which acquired the 26-second film.

Obama 2008

The announcement is the third effort by Washington to respond to public outrage over high pay at companies receiving taxpayer assistance. On Feb. 4, the Obama administration announced a proposal to set a $500,000 cap on cash compensation for the most senior executives at troubled companies getting “exceptional assistance,” and restrictions on cashing in on stock incentives.

That plan did little to quell public outrage as details of bonuses were disclosed at a number of major companies receiving federal assistance. Two weeks after the Obama plan was announced, Congress approved a $787 billion economic stimulus bill that included more restrictions on the pay of executives at institutions receiving aid. The provision, inserted by Senator Christopher J. Dodd, the Connecticut Democrat, over the objections of the Obama administration, instructed Treasury to come up with new rules for the five most senior officers and the 20 highest-paid executives at the most troubled companies. That legislation was the basis for the appointment of Mr. Feinberg. Mr. Dodd recommended the appointment of Mr. Feinberg to Mr. Geithner last month, a person briefed on that conversation recalled.

Metro seeks takeover of Arcandor

June 10, 2009

Metro, Germany’s biggest retail group, wants to buy the assets of collapsed retailer Arcandor.Arcandor, which owns 53% of travel firm Thomas Cook, filed for bankruptcy on Tuesday after the German government declined to bail it out.”We have a short and medium-term objective to create a large new ensemble,” Metro boss Eckhard Cordes told the ZDF television channel.Mr Cordes suggested the combination could be listed as a new company.Arcandor’s bankruptcy filing covers German retailer Karstadt and its mail-order businesses, but Thomas Cook is a separate operation and Arcandor said the travel company would “remain unaffected”.Metro would merge its Kaufhof chain of stores with Karstadt and retain about 160 of the combined 200 department stores, Mr Cordes said.The combined company could be sold after two years of restructuring via a stock market listing, a spokesperson told the Handelsblatt newspaper.Metro had been in talks with Arcandor on a merger of their department stores before the bankruptcy.Arcandor, which employs about 70,000 people, had sought 650m euros ($930m; £561m) of loan guarantees from the German government because about 600m euros of its loans needed refinancing.The German government was reluctant to help Arcandor, because the company was in trouble before the economic crisis. Shares in the company have dropped more than 70% this year, and they fell 81% last year.