Weekend reading links

1. A reality check on who owns agricultural land in South Africa.

White farmers still own roughly half of the country’s land although only 7 per cent of citizens are white.

2. Tej Parikh has a very good graphical summary of America's healthcare market.

The US spends more than $4.5tn annually on healthcare — and is projected to soon account for one-fifth of its economy. Even on a per capita basis, other large, rich nations spend about half as much as America. Healthcare is the largest component of US consumer spending on services (well above expenditure on recreation, eating out and hotels)… The economy has created 3.9mn private sector jobs since the start of 2023. More than half have come from healthcare and social assistance… studies have estimated that approximately 25 to 30 per cent of health spending could be considered waste.

Healthcare is such a major contributor to growth that any reduction will automatically impact job creation and economic growth. 

3. ExxonMobil, Occidental Petroleum, Equinor, and others are piloting a new drilling technique for lithium, direct lithium extraction (DLE), in the Smackover Formation area of the Southern US that has a massive brine aquifer. 

Underground brine reservoirs flowing across Arkansas and neighbouring states contain high concentrations of the silvery-white metal; a US Geological Survey study published in October estimated the total resource in south-west Arkansas alone at up to 19mn tonnes... “DLE could do for the US lithium industry and economy what fracking did for the US oil industry almost 20 years ago,” says Andy Robinson, a geoscientist and co-founder of Standard Lithium, which is seeking to develop a $1.5bn project near El Dorado in partnership with Norwegian energy group, Equinor.

Proponents say DLE offers a faster and less environmentally damaging alternative to existing extraction methods. For oil companies, which have extensive skills in drilling, pumping and processing fluids, it represents a useful way to diversify their businesses... But experts warn that US lithium pioneers must prove the new technology can be commercially successful at scale and compete with both existing extraction technologies and rival DLE projects in lower-cost countries...

Between 2020 and 2024 global demand for lithium tripled to around 1.2mn tonnes, according to energy research group Wood Mackenzie, which is forecasting lithium consumption will reach 5.8mn tonnes by 2050. To meet demand, producers have over the past decade expanded hard rock mining in Australia and China and lithium brine extraction in Latin America, giving these three regions control of more than 80 per cent of the extraction industry. Hard rock mining of lithium is much like any other metal production process; ores such as spodumene are excavated from open pit mines, crushed and chemically processed to separate the lithium. Brine extraction involves pumping lithium-rich brines into large ponds, typically in regions with a hot, dry climate. The water gradually evaporates, leaving behind concentrated lithium salts that can be processed...

Until recently, US-based lithium miners have struggled. They face higher costs, tougher mining regulations and less favourable geological and climatic conditions than in the “lithium triangle” in Chile, Argentina and Bolivia. The development of direct lithium extraction, which usually involves using solvents or ceramic materials to separate lithium from the brines, has changed all that. DLE takes a matter of hours to separate lithium from brines, while evaporation ponds can take as long as 18 months. Recovery rates are around 70 to 90 per cent, according to Wood Mackenzie, compared to 40 to 60 per cent for evaporation ponds, and DLE also uses less land and less water. Combined with the discovery of high concentrations of lithium in oilfield brines within the so-called Smackover Formation, which extends across Arkansas, Louisiana, Texas, Alabama, Mississippi and Florida, DLE has opened up an opportunity. Existing oil and chemical infrastructure in the formation also makes these resources more accessible than greenfield sites.

4. Great primer in NYT that has the list of all items Americans import from China. Goods that Americans import mostly from China.

The highest value of goods imported from China.

And America's biggest exports to China.

5. Tata Electronics bets big on iPhone manufacturing. But it comes with exacting standards on quality and productivity.

The company’s ambition to become an iPhone-manufacturing hub collides with the reality of high attrition, relentless production targets, and the ever-present pressure of Apple’s quality control. Inside the factory, each worker undergoes two to three weeks of intensive training before stepping onto the assembly line. Once there, their tasks are highly compartmentalised—a deliberate strategy to protect Apple’s intellectual property. Most workers only know how to assemble a specific section of the phone, with little visibility into the broader production process... An iPhone must pass through at least 600 quality checkpoints before it leaves the factory. A single defect can jeopardise an entire batch, sending costs skyrocketing and potentially damaging the supplier relationship. This is why Tata has invested heavily in automated equipment from suppliers like Delta Electronics, aiming to reduce defect rates and increase efficiency... the workers... shifts are standard eight-hour stints—6 am to 2 pm, 2 pm to 10 pm, or 10 pm to 6 am... That compartmentalised operation is about efficiency but also about Apple’s intellectual property. Keeping workers focused on their slice of the process helps prevent any accidental leaks of trade secrets.

6. Starlink compared to other telecom companies.

Also this article on Business Standard.

7. China tries to increase its soft power. The one area it appears to be having some success is gaming. 

Four of the ten highest-grossing mobile games of 2024 were made in China. One such is Genshin Impact, a role-playing adventure which rakes in over $1bn a year. Last year a Chinese firm released Black Myth Wukong, the country’s first blockbuster video game. Featuring the mischievous Monkey King, it is steeped in Chinese folklore. Some 30% of its 25m players are said to be outside the country.

8. One of the genuine successes of the Indian state, the taming of the Naxalite movement, which is perhaps in its end stages.  

9. Global Capability Centres (GCCs) are driving a boom in Grade A real estate in India that are ESG-compliant, and equipped with smart technology systems. 

Between 2022 and the first half of 2024, GCCs have leased 53 million square feet (msf) of office space. In 2024, they accounted for 36 per cent of total leasing activity, occupying 27.7 msf of the 77.2 msf transacted... The momentum has continued into Q1 CY25. Colliers reported that GCCs absorbed 6.5 msf of Grade-A office space in the quarter — constituting 41 per cent of overall office space demand across the top seven cities in India... In Q1CY25, GCCs leased 88 per cent of the total office space in green buildings as part of their broader commitment to achieving carbon neutrality...

According to Vestian’s sustainability report, green-certified office buildings commanded an average rental premium of 12–14 per cent over non-certified buildings. GCC-occupied office space in Bengaluru has been leased at a 50 per cent premium compared to non-GCC-occupied office space in FY25. The premium is 13 per cent in NCR and 9 per cent in Hyderabad... office rentals across the top Indian cities have grown between 9 to 28 per cent from 2022 to 2025, mainly driven by GCCs... real estate costs for the GCCs are not more than 6-7 per cent of their total cost of a GCC setup, which does not deter them from going for high-quality locations... According to Nasscom-KPMG report, the GCC market size in India tripled from $19.6 billion in FY15 to $64.6 billion in FY24. It is further anticipated to touch $110 billion by 2030, despite ongoing trade tensions and geopolitical frictions.

10. US-India pre-Trump merchandise trade tariffs.

11. Bola Tinubu's shock therapy appears to be working for the Nigerian economy.

On day one Tinubu removed a ruinously expensive fuel subsidy. More important still, the central bank has restored monetary policy orthodoxy after a shambolic era in which only cronies with access to cheap dollars benefited. After a dangerous overshoot, the naira has stabilised, with the gap between the official and black market rate shrinking to almost nothing. The central bank has stopped printing money to pay for government profligacy. Politicians still spend too much, often on fripperies like an extravagant presidential jet, but at least the government has begun to increase tax receipts. Investors do not live in constant fear of a devaluation and can readily access dollars. That may eventually help Nigeria to diversify, but shorter term it is positive that oil production has recovered from a nadir of 1mn barrels a day to nearly 1.5mn last month. Oil theft has been reduced and local companies are squeezing more out of marginal fields.

12. The decline of net FDI into India.

In 2020-21 and 2021-22, gross FDI inflows were adversely impacted by repatriation and outward investments to the tune of 46 per cent and 54 per cent, respectively. The extent of this impact rose sharply in the following three years — to 61 per cent in 2022–23, 86 per cent in 2023–24, and 99 per cent in 2024–25... the amount of repatriation and disinvestment in 2019-20 was about $18 billion, or about 25 per cent of gross FDI inflows. But the following two Covid years saw repatriation and disinvestment rising to account for a 33-34 per cent share of gross FDI inflows. In 2023-24, this trend became alarming, with the share of repatriation and disinvestment in gross FDI inflows jumping to 62 per cent. In 2024–25, the share inched up further to 63 per cent.

What this implied was pretty serious. Foreign investors in Indian companies were showing a marked preference for ploughing back their gains from here to reinvest in other markets elsewhere. Note that this trend has continued for the last two years... Indeed, reinvested earnings by existing foreign investors have stayed at well below a third of gross FDI inflows in these years. Nor has there been a marked desire on their part to increase reinvested earnings... Contributing to such gloomy prospects on the net FDI inflows front is last year’s data that shows how Indian companies are raising their outward FDI in a big way. Indian companies have stepped up their outward FDI during the post-Covid years — from $14 billion in 2022-23 to $16.6 billion in 2023-24, and to $29 billion in 2024-25.

In 2024-25, while India attracted $81 bn in FDI, foreign firms repatriated over $51 bn, and Indian firms' outward investment was $29.2 bn, leaving the net FDI inflows at only $0.35 bn. 

13. In a bid to overturn a system that the government believes is biased against it, Mexico goes to polls on June 1 to elect judges!

In elections on June 1, Mexico will replace almost 900 judges at the federal level and hundreds more across 19 state-level jurisdictions in a voting process never tried elsewhere that was implemented in just eight months... A random lottery decided which half of federal judges would be replaced on Sunday, and which in 2027. Most candidates for the vote were chosen by the ruling party and were not allowed any public or private funding. Some are openly associated with the ruling Morena party... The electoral institute expects turnout of about 8 to 15 per cent, compared with more than 60 per cent in last year’s presidential election... “Less than 1 per cent understand what they are voting for,” Jorge Sepúlveda, vice-president of the Mexican Bar Association. “Those that’ll vote will mostly be people propelled by the government.”... In Mexico City, voters must fill out nine ballots, choosing about 50 names from a choice of almost 300. Specialist judges were assigned to certain districts, meaning voters in parts of the capital will choose all the country’s competition and telecoms judges... An all-powerful disciplinary tribunal will be able to remove judges. Of 38 candidates for that, at least 10 have ties to the ruling party, including two who worked directly for López Obrador... One anti-corruption group identified 17 “high risk” candidates in judicial elections, including one who had worked for the Sinaloa Cartel’s leader and another who had worked for the leader of the Los Zetas criminal group. Saúl López, professor at Tecnológico de Monterrey’s school of government, said that the new system would offer “the maximum degree of capture, not just by organised crime but other economic powers”.

14. The disturbing monopoly in cloud computing.

Unlike traditional utilities, the dominant cloud providers Amazon, Google and Microsoft — which together control two-thirds of the global market — operate with minimal transparency or public oversight. This leaves governments, businesses and citizens vulnerable to systemic risks, while giving these corporations immense power to shape the digital economy to their advantage. It is no accident that the same behemoths that dominate ecommerce, digital advertising and operating systems also control the cloud computing infrastructure that underpins these services. Cloud is an extraordinarily capital-intensive business, with high barriers to entry and significant network effects. The data, technological capabilities and financial reserves controlled by these behemoths secured them advantages that smaller, independent rivals simply couldn’t match when cloud computing began to take off. But the companies haven’t just benefited from structural advantages; they’ve also engaged in anti-competitive practices, as documented by competition authorities across Europe, the US, Australia and Japan. These include opaque and discriminatory pricing, technical barriers to switching provider, excessive fees for data transfers and bundling cloud services with other products...

The dependence of many nations on a small number of US cloud giants is a geopolitical threat. Several existing US laws — including the Cloud Act — require providers to hand data to the American government when asked, even if stored on foreign soil... Big Tech’s cloud oligopoly undermines innovation. In artificial intelligence, for example, tech giants have been accused of trading cut-price access to cloud resources for intellectual property rights, equity stakes and strategic influence over leading start-ups, reinforcing their dominance across the sector.

Possible responses to this monopoly

Fortunately, most of the tools we need to address these problems already exist. Established frameworks — including utility regulation, competition policy and public procurement — can be drawn on to restructure and govern cloud infrastructure in the public interest. For instance, regulators should mandate fair and non-discriminatory access to cloud services, mirroring rules already applied to telecoms. This should include transparent, consistent pricing and a ban on unfair contract terms. Providers should be required to implement robust processes to ensure the stability and security of their infrastructure, with regular audits and stress tests. Governments should also rethink their procurement practices. Public institutions should not reinforce monopoly power by defaulting to the dominant providers. Finally — and most ambitiously — governments should consider structural separation. Requiring Amazon, Google and Microsoft to spin off their cloud divisions would eliminate their ability to use this critical infrastructure to extend their dominance into new markets.

15. With high tariffs comes trade crime.

In April, for example, Chinese exports to the United States fell 21 percent from a year earlier, but Chinese exports to Southeast Asian countries rose by the same percentage... An analysis by Exiger, a data analytics firm, found that more than 3,000 companies in Mexico depended on Chinese shipments for 75 percent or more of their supply chain. Many of these companies are subsidiaries of Chinese state-owned enterprises, and most sell products to the United States, the report said.

16. As PSG faces Inter Milan in this weekend's Champion League final, Simon Kuper writes that Paris has become global football's biggest talent pool.

Paris finally acquired a serious football club in 1970, when little Paris FC and Stade saint-germanois merged into PSG. (Paris FC soon walked out again.) At the time, the city’s growing suburbs, the banlieues, were filling with kids who had few entertainments besides football. In new towns short on markers of belonging, millions grew up supporting PSG as a way to feel Parisian. The popular claim that it’s a fake club with money but no fans is nonsense. The French state funded accredited coaches and artificial pitches in the banlieues. Soon, Greater Paris was producing more top footballers than certain continents. French teams packed with Parisians have reached four of the seven World Cup finals since 1998, winning two, and losing two only on penalty shoot-outs. The previous time PSG reached the Champions League final, against Bayern Munich in 2020, they lost to a goal by Bayern’s Parisian exile Kingsley Coman, but Parisian talent goes a long way down... PSG’s rise began in 2011, when the French president Nicolas Sarkozy, a fan, encouraged a wing of Qatar’s state to buy the club for a piffling €70mn or so. Sarkozy rooted out the hooligans, and Qatar bought superstar players. Two years ago, PSG’s front three were Kylian Mbappé, Neymar and Leo Messi. Yet PSG fans (I have two in my apartment) prefer today’s younger, harder-working, less-spoilt side.

17. Manish Sabharwal has a good compilation of "regulatory cholesterol"

Can women in India work the same jobs and the same way as men? No, they are banned from 32 operations and 200 sub-processes, including pottery manufacturing, cashew-nut processing, and glass manufacturing. Can employers think about hiring men and women for night shifts similarly? No: Women attract 59 special conditions for employers across states. Can factories use all their land? No: Fifty per cent of an industrial plot is lost to just three standards; micro and small factories lose the most land to standards more stringent than those of countries 10 times richer. Can workers work the hours they want? No: A factory worker loses 270 plus hours of annual earnings to working hour restrictions, and these limits force workers to give 156 to 416 fewer hours in a quarter than in Japan. Is building one 300-worker factory cheaper than two 150-worker factories in India? No: One 300-worker factory needs 40-80 per cent more land than two 150-worker factories. Do India and Singapore require the same number of floors to build a hotel with the same number of rooms? No: The same number of rooms requires three floors in Singapore and seven in Noida. Can all of rural India industrialise? No: Fifty per cent of rural areas cannot be industrialised due to minimum road width norms.

Limits to technology - body cameras edition

NYT has an excellent long read that evaluates the use of body cameras by police departments. It’s a sobering reminder on the limits to the use of technology in governance. 

Body cameras were once considered the holy grail to get police officers exercise restraint and thereby address the chronic problem of abuse and excess.

When body-worn cameras were introduced a decade ago, they seemed to hold the promise of a revolution. Once police officers knew they were being filmed, surely they would think twice about engaging in misconduct. And if they crossed the line, they would be held accountable: The public, no longer having to rely on official accounts, would know about wrongdoing. Police and civilian oversight agencies would be able to use footage to punish officers and improve training…

In 2013, Judge Shira Scheindlin was hearing testimony in a federal lawsuit in which multiple advocacy groups claimed that the Police Department’s aggressive “stop and frisk” policy was racially biased and unconstitutional… Two months later, Scheindlin issued a historic ruling that New York’s stop-and-frisk practices were unconstitutional. She ordered the Police Department to begin piloting body-worn cameras, writing that they were “uniquely suited to addressing the constitutional harms at issue in this case.” Scheindlin laid out three different ways the cameras would help: “First, they will provide a contemporaneous, objective record of stops and frisks.” She continued: “Second, the knowledge that an exchange is being recorded will encourage lawful and respectful interactions on the part of both parties. Third, the recordings will diminish the sense on the part of those who file complaints that it is their word against the police.”

… the technology represented the largest new investment in policing in a generation... Body-worn cameras were adopted by police departments across the country in the wake of widespread Black Lives Matter protests in 2014, sparked when Michael Brown was killed by the police in Ferguson, Mo... President Barack Obama put the cameras at the center of his plans to restore trust in policing. Cities quickly began spending millions on the devices, expenditures that continue today for storage and software. Los Angeles has spent nearly $60 million since getting cameras in 2016... New York City has spent more than $50 million...

But its outcomes have turned out very different from expectations.

As policymakers rushed to equip the police with cameras, they often failed to grapple with a fundamental question: Who would control the footage? Instead, they defaulted to leaving police departments, including New York’s, with the power to decide what is recorded, who can see it and when. In turn, departments across the country have routinely delayed releasing footage, released only partial or redacted video or refused to release it at all. They have frequently failed to discipline or fire officers when body cameras document abuse and have kept footage from the agencies charged with investigating police misconduct... But whether citizens benefit from the cameras they’re paying for is often up to the police, who have often been able to keep footage hidden from the public in even the most extreme cases... The reporting reveals that without further intervention from city, state and federal officials and lawmakers, body cameras may do more to serve police interests than those of the public they are sworn to protect.

To Seth Stoughton, a former police officer who is now a professor at the Joseph F. Rice School of Law at the University of South Carolina, body cameras represent the latest chapter in America’s quest for a technological fix to the deeply rooted problem of unchecked state power. “Dash cams were supposed to solve racial profiling,” he says. “Tasers and pepper spray were supposed to solve undue force. We have this real, almost pathological draw to ‘silver bullet’ syndrome. And I say that as a supporter of body-worn cameras.” 

Technology does not address the problems of poor governance, political economy, deeply rooted cultural attributes etc. If the stakes associated with some issue is very high, not even the most sophisticated the technology can address it. 

The secrecy undercuts the deterrent effect on officer behavior that many had presumed body cameras would produce. Three years before the Minneapolis police officer Derek Chauvin murdered George Floyd by kneeling on his neck, body-camera video caught him kneeling on the necks of others. In 2017, Chauvin dragged a handcuffed Black woman out of her house, slammed her to the ground and then pressed his knee into her neck for nearly five minutes. Three months later, Chauvin hit a 14-year-old Black boy at least twice in the head with a heavy flashlight, choked him and pushed him against a wall. The boy cried out in pain and passed out. Chauvin pushed a knee into his neck for 15 minutes as the boy’s mother, reaching to help him, begged, “Please, please do not kill my son!”

The footage was left in the control of a department where impunity reigned. Supervisors had access to the recordings yet cleared Chauvin’s conduct in both cases… “Chauvin should have been fired in 2017,” says Robert Bennett, a lawyer who represented both of the victims… A Department of Justice report from this summer found that the secrecy and impunity was all part of a larger pattern in the Minneapolis Police Department. Shootings, beatings and other abuse had routinely been captured on video. But the department didn’t make the footage public or mete out punishment… There was a similar dynamic in Memphis, where officers in a street-crimes unit regularly abused residents. They wore body cameras but faced no consequences until the case of Tyre Nichols, who was beaten to death this January by officers in the unit, attracted national attention.

There’s the issue of policy intent, as illustrated by the NYPD’s body cameras policy of 2017,

No video would automatically become public. Anyone that requested it would have to go through an opaque, often slow-moving Freedom of Information process — in which the department itself would be the arbiter of what would be released (though the courts could review that decision). The policy blunted the technology’s potential for accountability in other ways. Officers could decide when to start filming, instead of at the beginning of all interactions as the public wanted. And while the public had little access to footage, the police had privileged access: Officers who were the subjects of complaints would be allowed to watch the footage before having to give any statements — something that could allow them to tailor their accounts to the video. The policy was “so flawed that the pilot program may do little to protect New Yorkers’ civil rights,” Ian Head and Darius Charney of the Center for Constitutional Rights wrote in a guest essay in The New York Times. “Instead, it might shield police officers from accountability when they engage in misconduct.”

The lack of policy intent is demonstrated by the obfuscation and excuses given by the Departments in response to requests to release video footage of incidents under the Freedom of Information Act. 

After it rejected her initial request, she appealed the decision. The department sent her some redacted footage but again rejected her request for all of it. Disclosing the full footage would be an “unwarranted invasion of personal privacy,” the department wrote. Whose privacy — the dead man’s or the officers’ — was not explained. Releasing the full footage, the department insisted, could “endanger the life or safety of any person.”

Even oversight institutions within the government struggle to access the video footage,

The city’s Civilian Complaint Review Board had been vested with the responsibility to investigate New Yorkers’ allegations against the police… Nicole Napolitano… joined the review board as its new director of policy and advocacy in September 2017… As with most civilian boards across the country, the agency did not have its own access to footage. Like the public, it, too, had to rely on the cooperation of the department. To try to obtain footage, the board had to navigate a baroque multistep process. Written requests were submitted to a department “liaison” unit, which in turn forwarded them to the legal unit for review. Then the department had to locate the footage, which was a significant undertaking because it wasn’t cataloging the footage in any systematic way. Unlike in many other cities, the department’s cameras had no GPS location data. If a civilian making a complaint didn’t know an officer’s name or badge number, investigators and even the department could have a hard time finding footage. Perhaps most problematic for Napolitano, though, was the fact that the review board’s investigators had to agree to a strict set of conditions before watching videos of incidents. If they spotted other, unrelated misconduct, they were not allowed to investigate it… Napolitano and her colleagues noticed an even more troubling trend: The department would often tell the review board that the footage it requested didn’t exist — only for the civilian agency to later discover that wasn’t true. According to an analysis the agency put out in early 2020, this happened in nearly one of every five cases.

Internal controls just breakdown completely and egregiously when there’s no institutional resolve to address the problem.

This year, a federal court monitor wrote a scathing report about persistent problems with stop-and-frisk, the unconstitutional policing tactic that prompted Judge Scheindlin to order the department to adopt body cameras a decade ago. The monitor found that contrary to Scheindlin’s expectations, police supervisors weren’t using footage to flag misconduct. In a sample of cases the monitor looked at, supervisors reviewing footage of stop-and-frisk encounters concluded that 100 percent of the cases they looked at were proper stops. The court monitor reviewed the same footage and found that 37 percent of the stops were unconstitutional.

This conclusion about the reluctance of the Police Departments to use footage to enforce accountability is apt.

“Body cams are essential, if done right,” says a high-ranking commander who just retired and who spoke on the condition of anonymity because he still works in law enforcement. “They are a game changer.” He added: “If there’s a problem, you flag — and potentially there’s discipline. But that’s not happening in most cases.”… “Body-worn cameras have not been exploited the way they should be,” says Jeff Schlanger, the former deputy commissioner. “The way to true reform is through using body cams as an early-warning system, as a way to correct small mistakes before they become big mistakes. But there weren’t a lot of discussions about it. The N.Y.P.D. needs to do a lot better.”

This is the kind of commitment required to make such technologies succeed. 

One of the most comprehensive studies of the use of body cameras, a 2019 meta-analysis led by researchers at George Mason University, recommended that police departments consider using footage the way sports teams use game tape, to regularly review and improve performance.

Some observations:

1. There’s no denying that body camera is a very effective device to capture police actions and incidents. But body cameras are not very effective in reducing the problem of abusive actions and use of excess force by police officers. The difference between the two lies in the challenges arising from the use of body cameras to monitor and administer the actions of officers in police departments. 

2. This is the challenge with new many new ideas. Translating an idea or innovation to implementation at scale is a near universal problem, and involves the issue of how the new idea interacts with the system’s environment. 

3. Impact evaluations done in sanitised environments and supervised by energetic and committed research assistants merely assess the technical efficacy of body cameras in detecting abuses and excesses. They do not evaluate the efficacy of these cameras in reducing the systemic problem of abuses and excesses by police officers. In fact, they cannot ever evaluate such efficacy since there are too many confounders and systems vary widely in their characteristics. 

4. The technology innovation, body cameras here, have to be complemented with its effective deployment (positioned to capture actions, should not be possible for the police officer to tinker with it etc) and its effective adoption by the primary stakeholder (the police department in monitoring errant actions and administering disciplinary action). The last, in particular, is dependent on state capability, systemic culture, and governance. And none of these are addressed by the technology innovation. 

5. Technology solutions are rarely the solution to intractable systemic problems on social/public issues. At best they can improve things at the margins. In any case, without addressing the institutional structures or incentives or cultures that create these problems, technology solutions are unlikely to be of much use.

6. The most important requirement for successful adoption of such new technologies is institutional commitment. Without such commitment, the innovation is a non-starter. The system will easily stifle the innovation and leave it a failure or even worse than before. 

Weekend reading links

1. WSJ points to different ways in which businesses raise prices by stealth,

The average domestic airline ticket price is about the same today as 25 years ago, $260, versus $284 in 1996. And that’s before adjusting for inflation. How is it possible that the airline industry hasn’t increased ticket prices in over two decades? It isn’t, really. Most of us are paying a lot more to fly today, thanks to a combination of three covert price increases. First, airlines have unbundled services so that fliers pay extra for checking luggage, boarding early, selecting a seat, having a meal and so on. The charges for these services don’t show up on the ticket price, but they are substantial. Second, the airplane seat’s quality, as measured by its pitch, width, seat material and heft, has declined considerably, meaning customers are getting far less value for the ticket price. And third, many airlines have steadily eroded the value of frequent-flier miles, increasing costs for today’s heavy fliers relative to those in 1996...

shrinkflation—the common practice in the grocery industry of reducing weight, quantity or volume of a package while maintaining price. It works effectively as a covert price increase, because consumers are far more likely to notice price increases than equivalent weight or quantity decreases. Less well known is a little psychological trick companies use with larger packages. Many shoppers assume that such packages with labels like “Party Size” or “Jumbo” will be cheaper on a per-unit basis. This is often not the case. Brands routinely exploit this common consumer belief by marking up larger packages more, and earning a greater margin on them. Researchers call this a “quantity surcharge.”

Another article writes about airline prices.  

2. Douglas Irwin of the Peterson Institute for International Economics has a paper that examines the reasons for South Korea's spectacular export success in the sixties. Its share of exports surged from about 1% of GDP in 1960 to more than 10% of GPD by end of the decade, and 20% by early seventies. The export liberalisation was introduced overcoming strong domestic opposition by the US whose aid financed most of the country's imports amounting to 10% of GDP. The US pushed hard for an export promotion strategy that devalued the currency and liberalised foreign exchange controls. 

The turning point was the reforms introduced in 1964-65 by the government of President Park Chung- hee. 

A slew of regulations and previous policies of import repression, all motivated by the need to conserve foreign exchange, were swept away or relaxed in moving toward a more open (if still restricted) system related to foreign exchange... Under the new system, exporters could retain or sell all of their foreign exchange earnings at a competitive exchange rate. The move marked a big change from the export-import linkage in which only exporters had access to a limited amount of foreign exchange at an overvalued rate. Henceforth, exports were to be promoted by indirect policies, including easy access to credit, duty free imported raw materials, and tax exemptions rather than export subsidies or preferential access to foreign exchange, both of which were abolished. As a result, the government no longer regulated imports by controlling the allocation of foreign exchange; the quarterly foreign exchange budgets, which made allocations to particular importers for particular products and amounted to specific quantitative restrictions on imports, were no longer necessary... 

The cornerstone of the new export promotion stance was maintaining a realistic exchange rate, a policy augmented by low-interest loans and reduced taxes for exporters, easy importation of raw materials, intermediate goods, and machinery needed to produce exports, and the removal of many bureaucratic obstacles to exporting. These incentives were not selectively applied to targeted industries but generalized to all exporters as long as they proved capable of selling abroad and earning foreign exchange. However, it was not a liberalization in the sense of removing all controls and price distortions or allowing foreign firms to compete in Korea’s domestic market. 

3. Robin Wigglesworth has a profile of Larry Fink and BlackRock, the world's biggest asset manager with a portfolio kissing $10 trillion. 

An interesting snippet is that BlackRock was founded in the late eighties with a $5 million loan from private equity firm Blackstone, which in turn took at 50% stake. In fact, its initial name was Blackstone Financial Management (BFM). It soon developed its iconic market leading bond trading service called Aladdin (Asset, Liability, Debt and Derivative Investment Network). Its split from Blackstone and naming was interesting,

All BFM’s funds had tickers — a code that identifies investment vehicles in regulatory filings and data providers — that started with the letter B. But an agreement with Blackstone stipulated that the new name could not include the words “black” or “stone”. Bedrock was considered, but made too many people think about The Flintstones. However, the founders loved the name “BlackRock”. They appealed to Schwarzman and Peterson, pointing out that Morgan Stanley’s 1930s split from JPMorgan burnished both firms. Peterson and Schwarzman were tickled by the idea of BlackRock as an homage to Blackstone, and blessed the new name. In 1994, Blackstone finally sold its stake in BlackRock for $240m to PNC Bank in Pittsburgh, which folded all its own money management operations into BlackRock and eventually listed it on the stock market. A long-mooted initial public offering finally arrived on October 1 1999, by which time BlackRock’s assets under management had vaulted to a hefty $165bn.

This about the outsized influence wielded by BlackRock and Larry Fink,

BlackRock, Vanguard and State Street are by some distance the world’s biggest purveyors of passive, index-tracking investment vehicles, whether traditional benchmark-hugging mutual funds or ETFs that can be bought and sold throughout the day. The inexorable shift towards such funds has handed the industry’s so-called Big Three enormous sway in many corporate boardrooms. Lucian Bebchuk of Harvard Law School and Scott Hirst of Boston University estimated in a 2019 paper titled “The Spectre of the Giant Three” that the trio’s combined average stakes in the 500 biggest listed US companies had vaulted from about 5 per cent in 1998 to over 20 per cent. Their real power is even greater — and growing. Given that many shareholders don’t actually bother to vote at annual meetings, BlackRock, Vanguard and State Street now account for about a quarter of all votes cast on average, which will rise to 41 per cent over the next two decades, the academics estimated... In reality, calling it the Big Three is a misnomer. State Street’s inclusion is the legacy of its invention of the ETF, and its size and growth rate is far more modest than BlackRock or Vanguard’s. In practice, there is an emerging duopoly, and BlackRock’s pole position — and Fink’s willingness to throw its heft around more than Vanguard — has made it a target across the political spectrum... A host of former government officials work at BlackRock, and others have departed for plum jobs in the Biden administration. To some critics, BlackRock is the new Goldman Sachs.

4. Sometime back I blogged that India's economic weakness of recent times has its roots in pursuing economic orthodoxy. Shang Jin-wei appear to think that the same may be true with China's impending economic slowdown,

Some of the reduction in growth stems from China’s zero-tolerance policy toward COVID-19, which calls for more frequent lockdowns than in most other countries... But the pandemic is not the only factor behind the slowdown. The government’s green industrial policy, tighter regulation of the property sector, and blacklists of online platforms also have collectively curtailed growth. Following its pledge to halt the rise in China’s carbon-dioxide emissions before 2030 and achieve net zero by 2060, the government has forcefully and often abruptly reduced electricity generation in coal-fired power plants, sometimes by 20%... In addition, the “three red lines” policy, initiated in August 2020 and intensified this year, sets ceilings on property developers’ debt-to-asset ratio, debt-to-equity ratio, and debt-to-cash ratio. Because many of these firms could not meet one or more of the red lines, and banks and capital markets are reluctant to provide new financing, they must sell assets, scale down operations, or both... Lastly, the authorities’ decisions to blacklist online-education companies, ratchet up antitrust enforcement, and enact a broadly worded data-protection law have helped to halve the stock prices of many listed digital-economy companies over the last 12 months. And falling equity valuations are merely the tip of the iceberg, as many digital firms and their suppliers have had to scale back their ambitions and plans.

5. One of the surprisingly less used instruments in infrastructure financing is credit guarantees. It's an instrument that can help unlock domestic lending to risky projects.

In this context, the FT reports that the European Union intends to mobilise upto 300 billion euros by 2027 for infrastructure projects for a Global Gateway that responds to China's Belt and Road Initiative. 

The draft says... the plans also hinge on the use of “innovative financial instruments to crowd-in private capital”, including guarantees to cut the risks of private sector investments. About €135bn of investments will be enabled by guarantees from the EU’s new European Fund for Sustainable Development Plus programme. The Luxembourg-based European Investment Bank would also be involved. Grant financing of up to €18bn will come from other EU programmes. Half of the targeted spending of up to €300bn will come from European financial and development finance institutions, according to the draft.

6. Tamal Bandopadhyay points to the process of bank's market share being taken over by mutual funds and insurance, 

The credit deposit ratio of the Indian banking industry in the fortnight ending November 5 was 69.56 per cent. This means for every Rs 100 worth of deposit, the banking system has lent just Rs 69.56. This is the lowest since the fortnight ending December 9, 2016, when it had dropped to 69.29 per cent. Barring this aberration, in the past decade, the CD ratio roughly varied between 72 and 78 per cent. You have not mentioned this but the fact is the banks have already started losing the working capital business to the mutual fund industry whose assets under management in October were Rs 37.33 trillion, having grown more than five-fold in the past decade. During this time, bank deposits have grown around three times, to Rs 160.49 trillion. For long-term financing, the insurance industry, with a money bag of around Rs 45.5 trillion, is stepping in.

7. Pratik Datta makes important observations on the implications of using the IBC on discoms,

The US bankruptcy code explicitly preserves the regulatory agencies’ rate-setting authority under a plan of reorganisation. There is no similar provision in the IBC. Therefore, clarity is needed on the NCLT’s power to approve a discom resolution plan that proposes a tariff change. If the NCLT could do so, tariff changes through resolution plans would be binding on the State Electricity Regulatory Commission (SERC). The policy on this issue may have significant implications for discom resolution. 

Insolvency of such utility service providers may need special treatment to ensure continuity of supply. Wide-scale disruption of such services could have disastrous consequences for an economy. For this reason, the UK restricts the rights of energy suppliers and their creditors to initiate insolvency proceedings. They must first notify the financial distress to the Secretary of State and Ofgem, the energy regulator. Ofgem assesses whether a supplier of last resort could be appointed to take over the responsibility of the failed supplier. If that is not feasible, Ofgem or the Secretary of State may apply to the court to initiate a special administration regime that ensures continuity of supply.

Even assuming the PPAs being outside the scope of NCLT (and therefore the risks of governments remaining saddled with the high cost PPAs), any haircuts on debt will translate into lower debt servicing costs which, in turn, will have to be passed on to consumers thereby implicitly revising the current tariffs.

8. On wealth creation by India's pharmaceuticals industry,

Of India’s estimated 237 billionaires, 40 have made their fortunes from pharmaceutical companies, according to the latest Hurun India Rich List, released in September. Of the 1,000 or so Indians on Hurun’s list — for which the cut-off is assets of about $140m — 130 are in pharmaceuticals, highlighting the depth of the sector. Other Indian healthcare entrepreneurs have prospered in the pandemic, as demand for their services surged. According to Hurun, India has seven billionaires who founded hospital chains, diagnostics labs or other healthcare services.

9. Business Standard writes about grade inflation in Class XII marks,

While there has been a consistent 8 per cent increase in students appearing for the Class XII exam every year, the number of students scoring over 95 per cent has jumped 58 times for the Central Board of Secondary Education (CBSE) examinations held between 2010 and 2021. In 2010, only 1,202 students appearing for CBSE Class XII had secured over 95 per cent. This year, the number was 70,004. While students scoring over 95 per cent had increased 118.7 per cent in 2020, the increase in 2021 was 80 per cent... This has also resulted in colleges posting near-perfect cut-offs for their courses. In 2010, the average cut-off for BCom (Hons) and BA (Hons) Economics at Shri Ram College of Commerce — a top-ranked Delhi University college — was 91.75 per cent and 91 per cent, respectively. This year, the college put out a near-perfect cut-off of 99.5 per cent and 99 per cent, respectively, for the courses.

In response, the Government of India is planning to have a SAT-style centralised Common University Entrance Test (CUCET) for all undergraduate and graduate courses for all the 45 central universities to start with. 

10. India digital advertising fact of the day,

At Rs 23,213 crore, their (Facebook and Google) combined ad revenues is higher than the combined ad revenues of the top 10 listed traditional media companies at Rs 8,396 crore... Together, Facebook India and Google India corner up to 80 per cent of the domestic digital advertisement revenues... For the last financial year, Zee Entertainment Enterprises, which has the largest market capitalisation among listed media entities, reported total revenues of Rs 7,729 crore. Of this, revenue from advertisements were 48 per cent, or roughly Rs 3,710 crore. In comparison, Facebook India alone reported gross advertisement revenues of Rs 9,326 crore for financial year 2020-21, while for Google the same was Rs 13,887 crore.

But this is important in terms of tax avoidance,

Both Facebook India and Google India, however, lag on aspects such as net revenue and net profit, when compared to traditional media companies. For example, while Facebook India reported a net revenue of Rs 1,481 crore, and Google India reported a net revenue of Rs 6,386 crore, Zee Entertainment Enterprises reported a net revenue of Rs 7,729 crore. The main reason for this is that Facebook India and Google India operate on an advertisement reseller model in India, which means that they buy inventory from a global subsidiary of the firm’s US headquarters and then re-sell that ad space to their client in India. For this, they pay a share of their gross advertisement revenue to the global subsidiary from whom they purchase the ad space... Industry sources said that while Facebook India pays up to 90 per cent of their gross advertisement revenues to the global subsidiary, Google India pays up to 87 per cent.

11. The Economist has an excellent primer on the Omicron variant of SARS CoV 2 virus. 

In the simplest terms, this is what makes it dangerous,

It might be better at getting into human cells than its relatives were. It might also be better at avoiding the attentions of antibodies from vaccination or an earlier infection. Virologists had long thought that a variant which combined both those advantages “would be a pretty dangerous thing”, according to Noubar Afeyan, a co-founder of Moderna... Now “Omicron is exactly that”, Mr Afeyan says... The most worrying of Omicron’s mutations are in the gene that describes the spike protein. This is the tool the virus uses to bind itself to cells and enter them. Delta probably owes its greater transmissibility in part to the fact that it sticks better to cells. Its mutations produce a spike in which nine of the amino acids in the 1,273-amino-acid-long chain from which the protein is made are distinctively different. The mutations in an unnamed variant called C.1.2, which boasted one of the most mutated spike ever seen until the past few weeks, changed 14 of the amino acids. Omicron’s mutations change 35; ten of the mutations have never been seen in any of the variants of concern to date. Almost half of the 35 changes are in the receptor-binding domain, the business end of the protein when it comes to entering cells and also the part targeted by the most effective antibodies. By changing the shape of this part of the protein, the mutations could make Omicron better at getting into cells and also less easily recognised by antibodies that work against a different version of the spike.

This about the uncertainty of the impact of mutant versions,

The reasons a variant spreads in one place and not another are, like much of the rest of evolution, thought to be largely environmental. For SARS-CoV-2 a crucial part of the environment is the immune system, and immune systems are different all over the world. How different genes, endemic infections, general levels of health, microbiomes and more end up stopping one variant from displacing another is largely uncharted territory.

The good news,

Western countries where double vaccination is common are providing more booster shots. That makes sense even if it turns out that the antibodies the immune system generates in response to existing vaccines are not as well-tailored to Omicron as they were to earlier variants. The boosters will not make better antibodies, but they will spur the body into making more of them, at least for a while. Studies have found that the quantity of antibodies against sars-cov-2 matters even if the antibodies are not specific to the variant... Because the vaccines get cells to make spike proteins according to the recipe used in the earliest genomes to be sequenced, the neutralising effect of vaccine-elicited antibodies will be lower for Omicron. But... it is not clear how great the reduction will be... immunological protection is not provided by antibodies alone. Vaccines engage the immune system’s T-cells as well. These are lymphocytes that respond not just to finished proteins, as antibodies do; they also recognise protein fragments. Because 97% of Omicron sequences are identical to the original virus found in Wuhan... these T-cell responses should still work... most fully vaccinated people with boosters should at worst fall only moderately ill if infected with Omicron. Alessandro Sette, an immunologist at the La Jolla Institute for Immunology and his colleagues have shown that T-cells preserve 93-97% of their targeting capacity when faced with a new variant.

The most impressive outcome from the Covid 19 pandemic has been the remarkable speed of lab to market translations,

BioNTech is working on a vaccine using mRNA that describes the Omicron spike. So is Moderna. Both companies have been down this road before, developing tailored vaccines against Beta and Delta. They did not go into production because they did not, in the end, prove necessary; the original vaccines held up well... Morgan Stanley, a bank, reckons that both firms could make about 6bn booster shots next year. When studying vaccines against Beta and Delta, both firms worked to develop procedures that would allow modified versions of their jabs to be approved quickly by regulators. Ugur Sahin, the boss of BioNTech says that if a new vaccine does turn out to be needed, his firm could deliver it within 100 days: the estimate includes regulatory approval.

12. Finally, Interpol capacity fact of the day,

Interpol's annual budget is just €145m ($164m)—less than that of the New Orleans police department.

Predictive policing to deter crime

From the Economist Technology Quarterly,

Crime does not occur randomly across cities; it tends to cluster. In Seattle, for instance, police found that half of the city’s crime over a 14-year period occurred on less than 5% of the city’s streets. The red squares in Foothill district cluster around streets near junctions to main roads—the better to burgle and run while homeowners are at work—as well as around businesses with car parks (lots of inventory, empty at night) and railway stations. Burglars who hit one house on a quiet street often return the next day to hit another, hence the red squares.

The reference is to PredPol, a leading crime prediction software, which is used in Foothill and other districts across the LAPD, and each red square represents 2.3 hectare.  

Such algorithmic applications have two use cases - one to monitor the policeman's performance by measuring arrests and other specific actions, and second to deter crime by increasing surveillance and patrolling in high-risk areas. 

It may be the second use case that carries greater relevance for police districts in developing countries. Instead of focusing on punitive actions and personnel performance management, supervisory officials could focus attention on whether resources are being deployed in line with the diagnosis generated by the algorithms so as to deter crime. While the counter-factual of crime prevented is not easy to comprehend or communicate, this is a more sustainable and appropriate approach to using such applications, especially in the early stages.

I am reminded of the story of the Municipal Commissioner who used a similar approach to get the public health staff to keep the city clean. Sanitation in cities is critically dependent on night-sweeping of main roads and early morning garbage lifting, and cleaning of roads and open drains. It is therefore a practice for good Municipal Commissioners to make early dawn surprise rounds of the city streets. Though the Commissioner rarely ventures out of his car during the couple of hours of morning rounds, the likelihood of a surprise round by the Commissioner (or his/her easily recognisable car) has a powerful effect in keeping the public health workers on their toes.

Some of the more enterprising Commissioners, instead of waking up early in the morning, would send out just their vehicles with instructions to the driver to randomly cover a few streets! The galvanising effect was just as same! The same could apply to Police Commissioners making surprise night patrols. Anecdotally at least, in weak capacity systems, one could argue that Commissioners (Municipal and Police) who make shirking and non-compliance costly are among the most effective officers.

Signalling and deterrence are powerful forces in disciplining weak capacity systems and keeping order.

Weekend reading links

1. The agriculture distress cycle threatens to repeat again. Sample this latest status on farm prices in Maharashtra (unlikely to be much different elsewhere),

Barring soyabean, not a single commodity is trading at government-specified Minimum Support Price (MSP). In the case of perishables like fruits and vegetables, the situation is worse. Rabi tomato, which sells at the rate of Rs 10 a kg, is now trading at Rs 1-2 per kg at the markets of Narayangaon and Junnar. Onions, which till recently were fetching Rs 20 a kg at wholesale markets, are now priced at Rs 6 a kg... A crop like tur, which has reported lower sowing than last year, is also trading over Rs 1,200 per quintal below its MSP... Last year, the government had increased the procurement price of milk from Rs 24 to Rs 27 per litre. Dairies are, however, barely able to pay Rs 20 per litre to farmers owing to a glut of milk powder in the market. Sugar prices are on a steady fall which has made mills default in their payment. There are over Rs 2,200 crore in dues by the mills to cane farmers.

The result has been that farmers are staring at another debt trap. With no immediate relief in sight, the farmers find themselves with no option but to start a fresh stir. Their demands are no different from the last time — assured returns and a full loan waiver.

2. What explains economic growth? Free Exchange highlights the limitations of economic theories, 

An economist might explain China’s rapid growth in the 1980s by saying that it began to deploy more capital per worker and to adopt foreign technologies. Yet it was very clearly the result of a political decision to loosen state control over economic activity. It would similarly be accurate to say that China’s future growth will depend on how well it develops and deploys new technologies. But that depends on decisions about economic governance taken by its leaders, which will in turn be influenced by social and geopolitical forces that economists scarcely understand and generally ignore... a formula for growth that takes no account of social and political complexities is no formula at all... The economics of growth should therefore be central to the discipline, even though the questions it poses are objectively hard, and the answers rest more in history and politics than in elegant mathematics. Until they can give better answers in this area, economists should speak with greater humility about how this structural reform or that tax change might affect long-term growth. They have not earned the right to confidence.

3. India's state capacity problem in law and order management is acute even by the standards of the G-20 economies. 

4. Thomas Piketty uses evidence from France, Britain, and US for the 1948-2017 period to explore the long-run evolution of political cleavages and the rise of populist parties in recent times,

In the 1950s-1960s, the vote for left-wing (socialist-labour- democratic) parties was associated with lower education and lower income voters. It has gradually become associated with higher education voters, giving rise to a “multiple-elite” party system in the 2000s-2010s: high-education elites now vote for the “left”, while high-income/high-wealth elites still vote for the “right” (though less and less so). I have argued that this can contribute to explain rising inequality and the lack of democratic response to it, as well as the rise of “populism”. In effect, globalization and educational expansion have created new dimensions of inequality and conflict, leading to the weakening of previous class-based redistributive coalitions and the gradual development of new cleavages...Two main lessons emerge. First, with multi-dimensional inequality, multiple political equilibria and bifurcations can occur. Next, without a strong egalitarian-internationalist platform, it is difficult to unite low- education, low-income voters from all origins within the same party.

5. Tadit Kundu in Livemint explores the North-South taxation. I am not sympathetic to going down the numbers based approach on this issue. 

The issue here is not and was never about the cold logic of numbers. In fact, going down the numbers tunnel and framing the debate around it may actually be counter-productive. For example, establishing that fiscal transfers in per capita total population terms is not progressive, while refuting those critical of the current fiscal transfers regime, also makes it more difficult to moot any incremental progressivity. After all, after defending the status quo and the fact that transfers are not progressive, you cannot turn around and start arguing for increased transfers to the poor states. And the critics could come up with another framing, say, a fiscal transfers in per capita poor people population terms and maybe that is progressive? 

This is essentially a debate about being a nation state, a single country, and the appetite for the same. The numbers debate is a shadow-boxing for real and perceived emergent social and political trends. They need to be discussed in the open. In Econ-speak, it is about being an optimal currency area and the benefits of shared and mutually dependent prosperity. Net fiscal transfers across regions are necessary to sustain either a country or an optimal currency area. The counterfactual is the challenge with maintaining the European Monetary Union without a fiscal union. This has to be debated on those political and economic grounds. I have not seen too many of them. 

In any case, that federalism is never the case of each one's tax for himself, is borne out by the examples of other countries.

6. Just 13 years after the Multilateral Debt Relief Initiative which cancelled debt for African countries that met economic management and poverty reduction criteria, Africa stares at yet another debt crisis! The FT reports that 40% of Sub-Saharan African countries now are at high risk of debt distress - double that of five years - and the number of countries unable to service their debt doubled to eight last year.

It is taking a toll on public spending, as it eats up an ever increasing share of tax revenues and fiscal expenditures.

The problem with even a future debt relief becomes difficult given that almost half the region's debt comes from commercial sources instead of country governments, thereby making restructuring a difficult proposition.

Would be interesting to know how much is China's contribution?

7. Talking about China, sample the impact of Chinese loans funded railways investments in Pakistan,

In total, Islamabad says it has rehabilitated more than 300 locomotives, over 1,000 passenger coaches, nearly 5,000 freight wagons and 31 stations. Pakistan also purchased 75 high-powered locomotives last year in a $413.5 million deal with General Electric Co... Now the unprofitable state-owned Pakistan Railways has doubled its revenue to 40.1 billion rupees ($362 million) in the past five years and aims to do so again over the same time period... The drive is already attracting more passengers, up 25 percent to over 52 million people since 2013. Working through the carriages, 40-year-old Rana Iftikhar Ahmad has been selling snacks on trains for last 15 years and said his sales have grown as much as 50 percent in recent years. Five years ago a train from Karachi would take four days to get to Lahore, he said. That same route now takes just over half-a-day on the Green Line (22 hour express service from Islamabad to Karachi).

But the question is whether Pakistan can afford all these?

Beijing is set to upgrade a 1,163-miles track from Karachi to Peshawar near the Afghan border with an $8 billion loan to Pakistan. It’s part of Chinese President Xi Jinping’s Belt and Road trade initiative, which includes $60 billion of badly-needed works financed in Pakistan... To help ease increasing congestion in Pakistan’s second-largest city, a $1.6 billion metro-line in Lahore — funded by Chinese banks — is scheduled to open before this year’s vote.

8. On debt within China itself, nice summary of the problems by Henny Sender. The UBS estimate of debt-to-GDP ratio of 272%, itself a big concern, is surely on the lower side,

The biggest concern for a country with worsening demographics and which is trying to recalibrate away from investment to consumption is the rise in household debt, and in particular the spectacular growth of internet finance options like Peer-to-peer lending.

9. Adam Davidson thinks the Cohen raids form the beginning of the end for Trump,

Even if Trump pardons Cohen, the information the Feds have on him can become the basis for charges against others in the Trump Organization. This is the week we know, with increasing certainty, that we are entering the last phase of the Trump Presidency. This doesn’t feel like a prophecy; it feels like a simple statement of the apparent truth. I know dozens of reporters and other investigators who have studied Donald Trump and his business and political ties. Some have been skeptical of the idea that President Trump himself knowingly colluded with Russian officials. It seems not at all Trumpian to participate in a complex plan with a long-term, uncertain payoff. Collusion is an imprecise word, but it does seem close to certain that his son Donald, Jr., and several people who worked for him colluded with people close to the Kremlin; it is up to prosecutors and then the courts to figure out if this was illegal or merely deceitful... However, I am unaware of anybody who has taken a serious look at Trump’s business who doesn’t believe that there is a high likelihood of rampant criminality...

Cohen, Donald, Jr., and Ivanka monetized their willingness to sign contracts with people rejected by all sensible partners... There are important legal questions that remain. How much did Donald Trump and his children know about the criminality of their partners? How explicit were they in agreeing to put a shiny gold brand on top of corrupt deals? The answers to these questions will play a role in determining whether they go to jail and, if so, for how long.

10. Finally, India technical education fact of the day,

There were no takers for 51 per cent of 15.5 lakh BE/BTech seats in 3,291 engineering colleges in 2016-17.