1. Bypasses, aimed at keeping traffic out of the city centres and thereby prevent traffic congestion, are falling out of favour with British urban planners.
2. More signatures of Japan's demographic challenge - rise in uncontested victories in local government elections. This is striking,
In the most recent nationwide local elections, held in April, 30% of city mayors ran uncontested, up slightly from the previous poll in 2015. A whopping 45% of mayors in towns and villages were elected unopposed. A record number of local-assembly members, elected in each municipality, also won seats with zero votes. In some rural areas there were more assembly seats than candidates... The National Institute of Population and Social Security Research, a government think-tank, reckons about 95% of local municipalities will have fewer residents by 2045. Already, 80% are experiencing declining populations.
3. Is Nigeria, a country of nearly 200 million people, the biggest development disappointment of this decade?
Average incomes have been falling for four years; the IMF thinks they will not rise for at least another six. The latest figures put unemployment at 23%, after growing for 15 consecutive quarters. Inflation is 11%. Some 94m people live on less than $1.90 a day, more than in any other country, and the number is swelling. By 2030 a quarter of very poor people will be Nigerian, predicts the World Data Lab, which counts such things... The debt-to-gdp ratio is 28%. But Nigeria collects so little in tax that interest payments swallow about 60% of federal revenues... most citizens get few benefits from the state. Oxfam, a charity, ranks 157 countries on their commitment to reducing inequality, based on social spending, taxes and labour laws: Nigeria comes last... Nigeria’s electricity firms produce about as much power as the city of Edinburgh.
Very depressing!
4. On privatisation by stealth in India,
The state duopoly which once controlled Indian telephony has been reduced to a 10% share of the market... In 2016 Hindustan Machine Tools, which sold one in seven wrist watches in India at the turn of the century, down from nine in ten in 1990, folded... As recently as 2010 state-owned utilities generated nearly 80% of India’s electricity. Their share has fallen to 56%. These days just 15% of steel is smelted by the government, compared with one-third at the turn of the century... Between 2010 and 2018 the government’s share of banking assets declined from three-quarters to two-thirds.
5. Corporate tax rates - India tops, even if on a selective scale
6. More, from FT, on the asset-stripping and value destruction that goes on in the garb of private equity investing - this time from UK-based Greybull Capital,
Private equity is supposed to function by aligning the interests of all the investors. But in practice, that’s moonshine. The insiders receive hefty fees while having negligible capital at risk; their “upside” coming in the form of an option over the bought-out company’s equity... Perhaps the best analogy for the buyout firm is that of a croupier presiding over a roulette table surrounded by gambling addicts. Whatever the outcome for the players, the croupier makes a steady return. Indeed, if he wants to increase the take, he simply spins the wheel more frequently... The system is set up to guarantee fat fees and payments almost regardless of performance, generally channelled through tax suppressing structures. But the benefits for the wider economy are less appetising. Private equity looks increasingly like an exploitative racket, enabled by well-meaning regulation and misplaced incentives.
7. More generally, Gillian Tett has some striking data on the rise of private capital in the global economy,
Between 2000 and 2018 the number of private equity-backed companies in America rose from less than 2,000 to nearly 8,000. Publicly listed companies in this period, by contrast, fell from 7,000 to about 4,000... What is doubly notable is that the explosion of private activity is not restricted to equities. In the past decade, private debt markets have expanded at a striking clip, totalling more than $600bn today. Private infrastructure and real estate investment is also expanding. Indeed, Willis Towers Watson calculated a couple of years ago that global asset owners have now placed about 14 per cent of their assets in private markets (mostly private equity and real estate), up from virtually nothing a couple of decades ago. They predict this will rise to 20 per cent in 10 years.
As to reasons,
On the one hand, private equity, real estate and debt investments have often offered better returns than public equity in the past decade. And while these sectors used to be run like cottage industries, they are maturing — or at least aping some elements of public markets with slightly better reporting... At the same time, the raison d'être for public markets is faltering. They used to be seen as a more democratic and inclusive form of capitalism (because securities owners had a voice), offering more transparency (since there was more reporting) and liquidity (with more trading). It was also thought that if corporate managers faced the wisdom of (shareholder) crowds, companies would be better run. But the spread of dual class listings, which give a few owners disproportionate power, is undermining the idea of shareholder democracy. Meanwhile, critics argue that the rise of activist investors and quarterly corporate reporting has fostered a more short-term corporate culture.
8. Finally, as President Trump threatens punitive tariffs on Mexico to force it to curb illegal migration with major ramifications, here is a good NYT summary of the President initiated trade-wars. And Trump's obsession with tariffs has a long history. India is among the countries likely to be least affected by trade-wars.
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