July 2015
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postheadericon The Tyler Group Barcelona Hand and Gavel Economic: Keeping a Positive Outlook through the Present Economic Challenges

Many developing countries have muddled through from one economic crisis to another for decades, and a few only in recent years; but all have never felt as challenged as within the present global economic environment. With growing population being felt in urban centers , accompanied by increased unemployment, scarcity of resources and escalating prices, citizens can no longer feel as secure as before when life in general was more financially manageable and less socially turbulent. Natural calamities, on one hand, provide a real challenge, especially for nations which encounter them on a regular basis, aggravating their economic woes.

Yet in spite of what many people feel or perceive through the popular media, the overall reality portrays a brighter future for the global economy. We point to two factors that bring hope for a more stable and progressive economy in the future:

1. Levelling of the global economy for all countries to freely participate

Globalization, as it was originally designed by the engineers of the global economic program, has given a chance to many countries to participate actively in international economic activities due to the easing up of former trade and tariff restrictions. Developing and developed countries now have a healthier interaction through more trade interaction and exchange of technological expertise. The economic field is no longer an exclusive arena for the big countries to play in while the rest of the smaller ones struggle to survive among themselves.

This is proven by the fact that growth rates have increased for many developing countries: from Africa which is expected to attain 4.7% growth rate in 2014, to India which has a present robust 8.0% growth rate, and to East Asia which has shown consistent growth expected to average at 6.0% in 2014 and gain slightly in 2015 at 6.1%. This can only be a boost to the world economy as these regions are a rich source of raw materials for the rest of the globe. Allowing these once-undeveloped areas to the big picture will serve as impetus for more economic dynamism on a wider scale.

2. Political and financial leaders are the key to continued economic growth

Fiscal health is the major concern for all countries even before the exit of Greece from the EU and with unemployment still a big challenge everywhere, even in the US which had 7.0% unemployment late 2013 from 10% in 2010. However, inflation remains tame and could eventually slowdown and help spearhead the expected growth of the global economy.

Divisive politics and policies as well as adventurous economic and military expansionism exhibited by a few countries will put to the test the resolve of political and fiscal leaders as they steer the global ship through the turbulent seas ahead. Tensions among nations due to territorial conflicts will continue to challenge the community of nations as they try to stabilize the ship without causing it to implode from within. But if majority of the nations will exhaust all possible peaceful means to resolve conflicts, avoiding violent confrontation along national borders can be attained. As the world arbiter, the United Nations will have its hands full keeping destructive wars at bay.

The economic stability and overall security of the global community rests in the hands of a few leaders who are tasked to provide a vision of progress and sustainability not just into the next year but for a whole generation of citizens who will reap our present efforts at attaining worldwide political and economic security. With all the structures in place to allow nations to achieve this vision, all we need now is the individual and common will to work for that vision.

postheadericon French economist Thomas Piketty’s grim view of the wealth gap

French economist Thomas Piketty’s new book challenges the belief that free markets will automatically produce extensive prosperity.

Thomas Piketty, the French economist who was one of those who popularised the idea of a privileged 1 per cent, rings this alarm in his new book: The US economy has started to decay according to the ways of aristocratic Europe of the 19th century. Diligent work will be of less importance while inherited wealth will become more desirable. The wealth of the few will undermine the foundations of democracy.

Capital in the 21st Century has captured great interest as US political leaders argue whether increasing income gap is an issue that needs action.

The 700-page volume has been celebrated as one of the most important economic opuses in recent years, citing data from the past three hundred year to prove that the wealthy are hoarding more of an economy’s income than before and that prevailing regulations will mean that it will only grow.

People who support this idea cite the book as evidence that the wealth disparity must be reduced. Critics, however, reject the idea as being that of a left-wing ideologue.

Last week, Piketty’s book climbed to the top of Amazon’s bestsellers.

Unearthing information from 300 years of economic data, tax records, 19th-century novels and modern TV programmes, Piketty questions the assumption that free markets automatically produce extensive wealth.

On the contrary, he believes that the rich will become richer and everyone else will have almost zero chance of catching up.

Investments in bonds, stocks, land and buildings — the “capital” referred to in his title – invariably grow more rapidly than the incomes of the masses. By its fundamental nature, capitalism generates inequality and can undermine the stability of democracies, Piketty argues.

Economists used to view the thirty years after WW II as evidence of capitalism’s capacity to create and distribute wealth. Piketty argues that the era was a historical eccentricity produced by two world wars and the Great Depression decimating the wealth of the old establishment. Piketty believes higher taxes on wealth can control the spread of inequality. Moreover, he thinks that college education for more people will sharpen their skills through and could help reduce the effect of “inegalitarian spiral.”

During an interview with The Associated Press, Piketty, 42, talked on the “dangerous illusion” of the meritocracy, and his suggested solutions for controlling inequality.

Here is an edited summary of the interview:

What is the effect of a growing wealth disparity?

The major concern for me is actually the efficient functioning of our democratic institutions. It simply does not work well with an excessive form of oligarchy where 90 per cent of the wealth is owned by an extremely small class of people. The democratic model has always been seen to function within a moderate level of inequality. I believe one main reason why electoral democracy thrived in 19th-century America better than 19th-century Europe is because you had greater distribution of wealth in America.

Your research reveals that profits on investments – capital – increase more rapidly than wages and economic growth. But many people are of the persuasion that greater inequality can help generate more growth.

When inequality reaches an extreme, it completely stifles growth. There was extreme inequality in the 19th-century and growth was markedly minimal. Because the rate of growth of productivity was only 1 to 1.5 per cent annually [in 19th-century Europe], and it was below the rate of return to wealth, which averaged from 4 to 5 per cent, leading to huge inequality of wealth. We need to realize that innovation and growth alone are not sufficient to reduce the effects of the wealth gap.

Are we on the path back to the Gilded Age?

No one can really be sure. The main point of the book is that we are inside a pilotless plane. We must find a natural procedure or method that can assure us that we will find ourselves landing on a safe, acceptable level.

Would the impact of wealth inequality matter if wages for the middle class were still increasing?

There are two great forces that are pressing on the middle class from both sides. One is the increase of the compensation for the highest executives, which means that the share of wages going to the middle and lower class is diminishing. That has been particularly true in the United States. The other force prevailing is that the share of a nation’s income going to the workers tends to decrease when the share going to capital is growing.

You consider meritocracy a “dangerous illusion.” That runs opposite the view of many people who believe the US economy works.

Our modern democratic model is founded on the assumption that inequalities will be due to merit more than pure luck or inheritance. In some cases, meritocratic arguments are utilized by the winners of the game to justify the value of unhampered inequality. I do not believe we can find any sound justification for giving people more than 100 times the regular wage in order to produce highly-efficient managers.

People in Europe and the US have a nostalgic view of the post-WWII era. We experienced expanding national prosperity that benefited the majority of people. Can we still get back to that?

It was in reality a transitory period because of the very exceptional conditions. Growth was considerably high, partly because of post-war reconstruction and population growth, as a rule, had been extremely large in the 20th century. This is certainly not an option for policymakers. The other main reason I think we should not be nostalgic is that one of the reasons the inequalities were lower in the 1950s and 1960s is that the world wars decimated some of the inherited capital that was the cause of the previous inequality.

Why do you think a wealth tax would dampen the destabilising effect of growing inequality?

Instead of imposing a flat tax on real estate assets, you would impose a progressive tax on personal net worth. You would minimize the property tax for those who are striving to begin creating wealth.

Every American politician believes education is the solution to inequality and immobility. Can more education provide the answer?

Ultimately, education is the most potent levelling force in terms of wealth distribution. However, it is not sufficient. We need education as well as taxation.

How did watching US television programmes such as House, Bones, The West Wing and Damages assist you in writing this book?

They contain stories that show us how you can get rich, get poor, and so on. The heroes of the shows are mostly holders of PhDs. They comprise the model of skill-based inequality … [The TV series are] like novels in the 19th-century. They can portray in an extreme manner a type of deep justification or profound satire of the structure of inequality in our societies.

Critics accuse you being motivated by a political goal.

This book contains historical facts. It is up to people what they want to do with it. It has four parts and the last part deals with policy implications … For me, this is one of the least crucial parts. If you do not agree with these 100 pages, that is perfectly fine with me. The main objective of the first 500 pages is to assist readers and decision-makers to come up with their own conclusions.

Prior to the production and publication of the research findings done by Piketty and his fellow researchers, economists depended on less precise parameters of inequality.

For instance, there is the Gini index, from Corrado Gini, an Italian statistician who initiated the concept in 1912.

The index measures income distribution using a scale of 0 to 1. Level zero signifies a condition where everyone has the same income. On the other extreme, Level 1 means that all income goes to a single person.

The Census Bureau declares the United States possesses a Gini index of 0.48, up from 0.40 in 1967. But without the tax data introduced by Piketty and others, it would be more difficult to assess what that change connotes.

At face-value, the minimal growth hides exactly how much money has accrued at the top 0.01 per cent.


postheadericon Laws need to pick up with technology

Lawmakers and the courts have got to shift fast to address the civil rights implications of up-and-coming technology in a far more attached age.

A federal appeals court changed as an appeal by the lawyers debated that proof from a GPS device placed on a defendant’s car in Vermont with no search warrant was improperly allowed in a trial.

Rather common sense would have been dictated that law enforcement would require court permission to utilize a device as intrusive as a GPS to track a suspect.

But in 2009, what seems like common sense was not the law back then, after an agent from the federal Drug Enforcement Administration placed a GPS device on then-drug suspect Stephen T. Aguiar’s car.

In 2011, Aguiar was convicted of conspiracy and distributing cocaine in 2008 and 2009. William Murray and Corey Whitcomb, both convicted on lesser charges, evidence from the GPS tracking was also introduced in their trials.
And not until 2012 that it didn’t happen while the Supreme Court ruled that police must acquire a search warrant prior to placing GPS tracking devices on a vehicle.

In their ineffective appeal ahead of the 2nd U.S. Circuit Court of Appeals, the defence lawyers disputed evidence collected by means of the GPS devices with no a search warrant despoiled Fourth Amendment protection against unreasonable searches and seizures.

The appellate court acknowledged in its ruling, “The GPS device was used to track Aguiar’s vehicles on public thoroughfares, with technology undertaking an activity that police officers would have physically performed in the past.”

However the court said the U.S. Supreme Court ruling that planting a GPS device on vehicles to track movements amounts to a search, thus requiring a court-approved search warrant until three years after Vermont incident.

The ruling, in effect, says that in 2009 the law had yet to catch up to the growing use of a technology by law enforcement.

The high court ruling demonstrates how analysis of the law can become accustomed to the spread of new technology; nevertheless the pace needs to rise up.

The stand of innovation these days means that more than a few generations of a technology can come online in three years with new challenges.

Those assigned with saving Americans’ constitutional rights should keep up with the pace of promising technology.

postheadericon Lending to SME sector seen to grow in 2013

Two main banks say demand is the principal factor

Recent credit approvals and releases for small and medium-sized companies are expected to be slightly up in 2013 in comparison to 2012, as reported by senior officials of AIB and Bank of Ireland.

However, both Gerry Prizeman, small business and agriculture top official at the Bank of Ireland, and John Irwin, who leads strategy and enablement of AIB’s business banking section, said the principal factor for lending to SMEs is demand for loans instead of the accessibility of funds.

The two reported at the release of a new newsletter of SME market events, the DKM/IBF SME Market Monitor, which reviews 15 published indicators for the sector to come out with an evaluation of prospective trends.

Introducing the report, Annette Hughes, DKM economic consultants Director, said local demand was crucial for the SME niche although it remained quite weak.

Proof of a rise in local demand — which includes consumer, investment and government disbursements — would propel the need for credit but “that remains to be seen”.

Although a few fresh inclinations have been heartening, including unemployment reduction and enhanced consumer and purchasing managers’ outlook, stable positive increase in local demand is not likely to occur soon.

Mr. Prizeman stated that whereas the decrease in the number of banks doing business in the Irish market would not aid the credit flow, the departing banks may have already been “emotionally absent” from the market and SMEs who were transferring their business to Bank of Ireland or AIB might face a more optimistic outlook when they start to transact with banks that are dedicated to the Irish market.

He stated that his bank approved loans of €3.6 billion in 2012 but that only €1.8 billion was availed of.

Mr. Irwin said that, in general, the quantity of capital out on credit to SMEs remains on the downtrend, which is not good for banks. Demand was the primary factor to be considered, he said.

Likewise, he mentioned that it was at times due to the fact that a creditable core business was maintaining real estate liabilities. Such conditions could be quite intricate; but they needed to be addressed for the general advantage of the economy. Several SMEs that claim they fail to get loan approvals in spite of running profitable companies fall under those conditions.

postheadericon Eurozone business growth slows

The pace of growth among businesses in the eurozone eased in October as the service sector slowed, a survey has indicated.

From 52.2 in September, the preliminary Purchasing Managers’ Index (PMI) from research firm Markit fell to 51.5.

Nevertheless, a reading above 50 still entails expansion, and activity has now developed for four months straight.

Markit said expansion was “broad-based” across the eurozone, although growth slowed in both Germany and France.

Germany had seen growth slow to a three-month low. It has been the chief economic powerhouse for the eurozone in the past years.

Markit also noted that the eurozone’s jobs market remained weak. Employment fell for the 22nd month in a row, with the rate of job losses picking up from September.

“The survey data have been running in positive territory for four consecutive months now and indicate that the eurozone economy expanded at a quarterly rate of 0.2% at the start of the fourth quarter, suggesting an ongoing, albeit sluggish, recovery,” said Chris Williamson, chief economist at Markit.

Slow improvement

Spain was one of the hardest hit by the credit crunch and subsequent economic recession. Spain’s economy has been showing signs this week that it is bit by bit beginning to make progress.

Unemployment rate is one of the highest in Europe. Official figures show the country’s unemployment rate fell slightly in the third quarter of this year, to 26% from 26.3% in the previous quarter.

The Bank of Spain said On Wednesday that the country’s economy had emerged from recession after growing for the first time in more than two years.

The bank projected that Spain’s economy raised by 0.1% between July and September.

The eurozone came out from recession in the second quarter of this year when it grew by 0.3% following a record 18 months of economic contraction.

On the other hand, earlier this month, European Central Bank (ECB) president Mario Draghi said the recovery in the bloc remained “weak, fragile, uneven”.

He said further support for the banking sector could not be ruled out, and that the ECB was “ready to consider all available instruments” to maintain financial stability and ensure that recovery in the eurozone took hold.

There has been assumption that the ECB has the possible to offer one more round of not expensive, cheap, long-term loans to banks to keep the cost of credit down.

postheadericon BlackBerry’s BBM Messenger begins phased roll-out: ‘Next 5 million in line – your turn!’

October 22 this year is the launch of BlackBerry’s BBM messaging app. It has finally begun, with the app rolling out to customers these days after a proposed launch last month was delayed by leaked software.

BlackBerry made the app available to customers in phases, with their blog teaching users to download the app from the iOS app store or the Google Play Store and enter their email. Then they will receive a message when the app is ready to use.

According to BlackBerry’s reports, “in just seven hours, about one million Android users were using the unreleased version of BBM for Android,” and that they are currently serving the “next 5 million in line”.

Those users who signed up for email notifications about BBM messenger last September will be the first in line to get access to the app, though BlackBerry are promising that “our team of developers and engineers has been working around the clock to bring you BBM – and make some upgrades while we’re at it.”

The first feedback from customers that had comments reported that the app is essentially a straight port from BlackBerry devices, with the same layout (swipe from the left for access to conversations, contacts and groups; swipe from the right for help, settings, and inviting friends, etc) used in both iOS and Android.

Nevertheless, definite features such as Voice and Video Chat are only available through the BlackBerry 10 operating system, also the app is lacking several functions like that of contact sharing and video file transfers available to competitors like WhatsApp, WeChat and Line.

The attention around BBM must be moving for a company whose future is so unsure, but the messenger-app market has distorted given that BlackBerry had its peak of its success. While in the UK, it may still have comparatively high support but globally the market now belongs to competitors naming WeChat and Line.

Communicating at the NokiaWorld event in Abu Dhab it revealed that rival OTT (over the top) messaging app WhatsApp announced that the company had now hit 350 million monthly active users.

WhatsApp CEO Jan Koum also announced that the app would be directly integrated into three new Nokia Asha devices – low-budget handsets aimed at the developing market. WhatsApp aren’t looking for the next 5 million users but they’re looking for the next 350 million now that sales of Asha devices going strong in developing markets.

postheadericon How the UAE can improve its financial literacy

Financial literacy is the awareness of how money functions and the capacity to handle one’s finances successfully. While it is not a new idea, it is a completely recent phrase frequently used in the UAE.

Why is this so? The reason, it appears, is that we are a not a financially knowledgeable nation.

This can be clearly gleaned from our amount of debt, which constantly increases. In spite of the fact that the Central Bank introduces more rigorous qualifications for individual lending in 2011, banks are still allowed to grant loans of up to 20 times a person’s monthly wage, with instalments not to go above 50 per cent of monthly wage.

The worth of personal debts in the country rose by 3.8 per cent to Dh270.7 billion between January and May this year alone, according to the Central Bank. That sum is over and above the Dh8.8 billion increase in individual loans reported during 2012.

In addition, a survey by The National Family Status Observatory in 2012 revealed that about 60 per cent of Emirati families disbursed about one fourth of their monthly earnings repaying loans from credit cards and individual loans.

Those figures are excessively high, says Keren Bobker, the financial counsellor who writes The National’s “On Your Side” column.

“A major fraction of the population has total monthly loan obligations that surpass their income,” she says. “Inescapably, this will end up in defaulting on payments and other dire consequences.”

So why is the UAE exceedingly financially uninformed? “Many factors can explain this predicament,” Ms Bobker says. “These comprise having to handle financial products in a second language; absence of transparency in terms of many financial products and services; lack of help from banks, and excessive hard selling which are improper.”

Having debts has been embedded into the culture, she says. “So many citizens here simply believe that having large uncollateralized loans is natural and end up paying huge amounts of interest without truly understanding the real cost of spending and, more so, whether the loan is at all needed.”

Not possessing as much consumer protection as other developed countries and without a regulatory agency which can assist citizens with their complaints, aggravates the condition, she adds.

It is not surprising therefore that financial literacy is already a principal subject of discussion in the UAE. And with a portion of the nation’s economic-development program aimed at producing a financially knowledgeable society that will prop up a sustainable, diverse economy by 2030, several financial institutions have initiated programmes to resolve the problem.

Banks, institutions such as the Emirates Foundation and the Abu Dhabi Council for Economic Development, as well as private firms include the many which have joined in this vital task.

The Emirates Foundation, an autonomous philanthropic organization formed by the Government of Abu Dhabi to support public-private financed projects to enhance the welfare of citizens all over the nation, is coordinating with financial professionals, banks and the private sector to motivate people to administer their finances more efficiently.

With the help of a financial awareness promotion called Isrif Sah (Spend Right, in English), the foundation hopes to form a cadre of 100 Emiratis who will be educated to become experts in personal finance and help others in turn. Eventually, the foundation will tour the country, catering to students in schools and universities as well as consumers in the malls, to assist in disseminating the message.

Sheikh Sultan bin Tahnoon Al Nahyan, managing director of the Emirates Foundation for Youth Development, states: “Financial literacy has arisen as an increasingly vital issue particularly in the light of the global economic crisis, where efficient handling of debt came out as a very crucial matter. We aim to help the youth in the UAE obtain the proper knowledge to help them avoid excessive debt and handle finances in order to support themselves and their families all through their lifetime.”

By: Erin McCafferty

postheadericon Counterfeit Cashier’s Cheque

It is more likely, if you’ve sold popular items on Craigslist or Ebay, that you have been contacted by people that raise the scheme if they can pay by a party cashier’s check. The typical story goes like this; on behalf of the buyer someone else will going to pay you for the reason that that person owes money from your buyer. To make it more believable, they will add some authentic sounding story like the buyer will say they are from a different country and that this is a way to make the payment easier.

As soon as you accept this conditions and the moment you receive the check you will realize that the amount of the check is more than the price purchased. Soon enough the buyer will ask you to send him the difference trough Western Union.

Next thing you’ll know after you sent the buyer the difference, he swiftly runs into some financial difficulty and will ask you to cancel the sale and send the rest of the money.

And almost immediately, you will realize that the cashier’s check is fraudulent and what makes it worst is your bank will try to reclaim the funds from you.

In this case the popular belief that cashier’s checks mean that you are guaranteed the money is unreal. What happens is usually your bank will clear the funds quickly but there is still a window of several weeks which the payment can be determined fraudulent and reversed.

What you can do must take not of are the following:

•Be distrustful of any payment agreement that involves person other than the buyer.
•Become conscious that cashiers checks are not an assurance that the funds will clear.
•Not under any condition you must send money back to an unknown buyer.
•And not under any condition you must send money to someone you don’t know through Western Union or another such untraceable service.

postheadericon Super capacitor that can recharge your mobile phone in just 30 seconds

From the observation and experience of an 18 year-old girl, the so-called super capacitor was made.

You don’t have to worry whenever your mobile phone battery gets low. A super capacitor is able to pack a lot of energy into a small and cramped space. At the same time, the device is also able to charge quickly in as little as 30 seconds while holding its charge for a long time.

The said invention of a major science awardee- Eesha khare at Lynbrook High School in Saratoga also capable of lasting up to 10, 000 charge-discharge cycles, and a big jump compared to the usual 1000 cycles for the commercial rechargeable batteries available in the market.

In an interview with NBC News, she shared that her inspiration in developing her invention is her mobile phone battery’s short lifespan. More so, Eesha says super capacitors also allowed her to further study nanochemistry, which she believes allows for significant advances in many other fields in science.

Applications for Eesha’s invention seem very bright. Although she has only tested the super capacitor in powering an LED (light emitting diode), she sees it to be fitted in cellphones, tablets, and other mobile devices that seem to grow more and more power hungry each day. With her invention The Tyler Group Barcelona stresses that it could be possible for tomorrow’s gadgets to last not just hours but days or even weeks on a single charge. Also, her invention is designed to be flexible enough to be used in roll-up displays such as in clothing and advertising mediums. In the long run, numerous other applications could utilize Eesha’s invention.

postheadericon Myanmar released dozens of political activists

Myanmar on Tuesday pardoned dozens of political prisoners a day after the European Union agreed to end almost all sanctions against the former pariah state, activists said.

Bo Kyi of the Assistance Association for Political Prisoners (Burma) said, at least 59 political prisoners were included in the latest amnesty.

“More than 200 political prisoners are still in prison,” he continued. “Political prisoners should be recognized as political prisoners and be released unconditionally.”

He said, the amnesty included 40 former rebels from eastern Shan state jailed for drug trafficking while describing them as “victims of politics”.

Nyan Lin, another activist, from the 88 Generation group, confirmed that at least 30 political prisoners were released.

Based from his counting, he included 17 Muslims arrested and charged under the emergency act after religious clashes in the central town of Kyaukse in 2003.

A Myanmar government official said that total of 93 inmates were pardoned but did not identify them. Out of the pardoned inmates, three were foreigners.

He said, “This release aims to allow them to participate in building the country and is also based on humanitarian grounds.”

According to State Department spokesman Patrick Ventrell, the United States welcomed the latest release but called for the unconditional freedom of all political prisoners.

Since President Thein Sein took power in March 2011 Myanmar has freed hundreds of political detainees although they have been long denying their existence. The government publicized a reassessment of all politically allied cases in November last year.

Myanmar’s former junta was accused by rights groups of wrongfully imprisoning about 2,000 political opponents, dissidents and journalists.

And activists state Myanmar’s government has used a series of headline-grabbing prisoner releases for political gain.

In November it seems that it was done to coincide with a landmark visit by US President Barack Obama when the country’s new reformist regime pardoned dozens of political prisoners.
“I think the government is releasing prisoners because the EU lifted sanctions. We welcome their release,” said activist Toe Kyaw Hlaing, who has been working to secure pardons for imprisoned dissidents.

Rights groups have cautioned that the EU risk losing leverage against Myanmar by scrapping the measures.

On Monday, New York-based Human Rights Watch accused Myanmar of “a campaign of ethnic cleansing” against Rohingya Muslims in the western state of Rakhine as they cite evidence of mass graves and forced displacement of tens of thousands.

The Rohingya, who are denied citizenship by the country also known as Burma, have faced crimes against humanity including murder, persecution, deportation and forced transfer, the watchdog said.

The government denies but the results of the HRW report were released on the same day that the European Union raised all remaining sanctions against Myanmar, apart from an arms embargo, in a move that HRW described as premature.

Myanmar’s foreign ministry welcomed the EU move, saying it would be “greatly beneficial to the Myanmar people who have demonstrated their strong determination to achieve democratic reforms and have been actively supporting the government’s reform process during the last two years”.