Out of Africa - into Europe

This was an eye-opener, and a reminder about how little I know about Africa.

Having studied with a group of Africans I also find it surprising that even as a part of academic discussions at Tsukuba University on this very topic, there were no fiery discussions on the three key events mentioned by Dr. Arikana:

• Berlin conference of 1884-85 for amicable division of Africa into European colonies - a meeting of 14 colonial powers for drawing of arbitrary boundaries, creation of countries that exist today.
• The French government arm twisting its colonies to sign, during 1958-61,  a pact for the Continuation of Colonisation - "The Colonial Debt" 
• 1963 - Addis Ababa conference that lead to the creation of Organisation of African Unity (OAU) by just seven states - Ghana, Guinea, Mali, Egypt, Morocco, Algeria and Tunisia.

Some of the numbers presented are truly cringe-worthy. As a repayment for "civilising" the Africans, for teaching them how to 'eat with fork and spoon', 14 French colonies were were required to deposit 80% (now down to 60%) of their bank reserves with the French Ministry of Finance. This self-serving arrangement enables France to extract no less than USD 500 billion from these 14 countries every year!

Since these 'Francophone' depended almost entirely on their former colonial master for marketing their minerals (first right of refusal), their military hardware, for their printed currencies, and for the education of their elite, the dependencies are almost hardwired. Countries that try to come out of the Colonial Debt are rewarded with coups (no less than 60 so far), assassinations and 'engineered chaos'.

On the 100th anniversary of the Jallianwalla Massacre, it does seem like a miracle that we Indians managed to get independence with just the partition of the subcontinent!

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LINKS & REFERENCES

* https://blogs.mediapart.fr/jecmaus/blog/300114/franceafrique-14-african-countries-forced-france-pay-colonial-tax-benefits-slavery-and-colonization
* The French African Connection - https://www.aljazeera.com/programmes/specialseries/2013/08/201387113131914906.html
* The Berlin Conference of 1884 - https://en.wikipedia.org/wiki/Berlin_Conference

Promising the Skyscrapers: Jaypee's Corporate Debt Burden

There was a showdown yesterday in our neighborhood yesterday. About 4000 homebuyers staged a protest against the Jaypee Group for its failure to deliver their apartments on time.

The anger and rustration of homebuyers is undertandable. Having been promising a "Wish Town" with sprawling lawns, gold courses, playgrounds and various other amenities , and having invested  their life savings to buy a home of their own, they are now being left in the lurch. Apartments that were to be handed over in 2011 are still undelivered. Across the expressway, a vast array of unfinished apartment complexes can be seen on the horizon -- empty shells of brick, cement and concrete, with no sign of life, or work-in-progress.

A number of protests have been taking place from time to time. The last one led to a blokage on the expressway, and this one was aparently triggered by a decision in the High Court. The Allahabad bench of the National Compaly Law Tribunal (NCLT) admitted IDBI bank's insolvency plea pertaining to Jaaypee Infratech. The company had failed to repay a loan of INR 8500 Crores (USD 1.3 billion).

Behind the anger and frustration of the homebuyers is the larger picture of Corporate Debt in India. Thanks to poor internal controls, bad debts in Indian banks has shot up to INR 7,00,000 Crores (USD 109 billion) over the last two years. In order to defaults companies have been on fire sale of assets: Reliance Communications (RCom), which had debts of over Rs 47,000 crore sold its tower business to escape default default, the Ruias have sold their oil refining business to Rosneft, GMR and GVK parts of their airports and power businesses, and Vijay Mallya parts of his liquor businesses that were mortgaged to fund Kingfisher Airlines.

Jaypee group’s debt is over Rs 75,000 crore (USD 11b). So, according a report in the Hindu:

"... the group has agreed to sell its 20mtpa of cement assets to Kumar Birla-led Ultratech for Rs 15,900 crore. This will leave its listed entities with about 6mtpa of cement capacity, three thermal power plants, one hydropower plant, an expressway project and land parcels. It is looking to sell most of these assets at the right price, but buyers are not easy to come by. Aside from selling stake in its land parcels and the Yamuna Express Highway, the group is looking to sell its remaining cement plants for Rs 4,000 crore and its Bina thermal power plant for Rs 3,500 crore. In the last year, the group has defaulted on payment obligations worth $350 million. Analysts say its capacity to service its debt has not improved."

No wonder there are few takers when the Jaypee Group boss, Manoj Gaur, tries to tell the homebuyers that their "investment is safe".

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LINKS & REFERENCES

* (2017) - http://www.hindustantimes.com/noida/noida-authority-jaypee-tell-homebuyers-not-to-panic-assure-their-money-is-safe/story-nYjtbZb1bR6tzfYbZitI2N.html

Jaggi on the slowdown (30may17) https://swarajyamag.com/economy/not-just-demo-pm-modis-black-money-chase-is-x-factor-in-growth-slowdown

(2017, May) Financial Express - http://www.financialexpress.com/industry/banking-finance/demonetisation-impact-bank-npas-mount-to-rs-614872-crore-set-to-rise-further/558916/
- They now constitute 11 per cent of of the gross advances of Public Sector Unit (PSU) banks. In all, the total NPAs including both the public and private sector banks were Rs 697,409cr in December 2016. These figures were compiled by Care Ratings.

 - 31 May - Reliance Defaults -  https://www.bloombergquint.com/markets/2017/05/31/an-ambani-default-won-t-fly
Andy / Bloomberg - http://m.economictimes.com/industry/banking/finance/banking/at-this-rate-fintech-will-slaughter-indias-banks/articleshow/58782969.cms

The Hindu- http://www.thehindu.com/business/Industry/the-biggestever-fire-sale-of-indian-corporate-assets-has-begun-to-tide-over-bad-loans-crisis/article8573163.ece