The Sense of Smell

Remember this post about 'The Most Translated Books of the World'? 

Well, a few days ago, I decided to pick one of the few European books that I had not read in that collection - the most translated book from Germany -   Patrick Süskind's "Perfume: The Story of a Murderer', which apparently has been translated into no less than 49 languages.

It seemed to deal with an interesting topic - the sense of smell - which is perhaps the most evocative of our sense perceptions, and one that often triggers a flood of memories. There is a certain agarbatti fragrance that instantly takes me back to my wonder years in Hyderabad, a childhood filled with sunny days squinting at floating kites, of playing and wandering about without a care in the world; The smell of musty books takes me to my grandfather's library in Kerala, of hours spent flipping through books I had been explicitly banned from reading (was that a trick to get me interested in books?). A couple of years ago when I landed up for my first UN assignment in Afghanistan, I kept wondering why buildings at Green Village reminded me so much of Tsukuba University in Japan, until it struck me that they were using a floor cleaner with the exact same fragrance! 

This book tells us the story of an orphan named Grenouille who was born in the 1700s and promptly discarded  in an offal heap at a slaughterhouse in Paris. The child grows up to discover that he has an unusual talent, an obsession for smells and odours as well as the ability to recreate them.  He first starts earning his keep as an apprentice at a tannery, then wheedles into a becoming an assistant to a leading perfumer in Paris, before becoming a serial killer who ultimately never gets punished for his crimes.

As expected, the narrative serves dollops of gyan on the art of making perfumes, but then goes overboard over their power to influence human behaviour: 

"Odours have a power of persuasion stronger than that of words, appearances, emotions or will. The persuasive power of an odour cannot be fended off, it enters into us like breath into our lungs, it fill us up, imbues us totally. There is no remedy for it... for people could close their eyes to greatness, to horrors, to beauty, and their ears to melodies or deceiving sounds. But they cannot escape scent. For scent is the brother of breath...

"There are scents that linger for decades. A cupboard rubbed with musk, a piece of leather drenched with cinnamon oil, a glob of ambergris, a cedar chest - they all possess virtual eternal olfactory life. While other things like lime oil, bergamot, jonquil and tuberose extracts, and many floral scents -- evaporate within a few hours if they are exposed to the air in a pure, unbound form."

The book itself is fast-paced and describes Paris and France in a way that is not very different from Victor Hugo's "Les Misérables". In this storyline you travel from Paris southwards to the barren hills of Plomb du Cantal,  Montpellier, Grenoble and then to Grasse, north of Cannes.  

Yet, unlike Hugo's classic it descends into incredulous levels, like a pet peeve that has run amok, taking the story to a point where you just wonder - Why would anybody want to translate this book into so many languages? Is this really the most translatable book that German language has to offer? 

-------------------------------------------

REFERENCES

* Book - Süskind, Patrick (1985): "Perfume - The Story of a Murderer "

* The Smell of Evolution (NatGeo)

Across the Waters

 The Suez was in the news last month. A single, massive ship passing through the canal got blown by the winds and ended up getting wedged across the canal, blocking traffic for a week. During this period it effectively blocked the passage of about 400 ships and prevented an estimated USD 9.6 billion worth of trade!

How did we end up getting so completely dependent on the Suez and Panama canals? What is it that drives us to make bigger and bigger ships that need wider, deeper shipping docks and canals that cut across continents? The simple and obvious answer is global trade, and the economy of scales that drive it. If simple answers do not satisfy you, the book you need to read is David Abulafia's "The Boundless Sea".

This book is a serious piece of work - over 800 pages of which nearly half is references and citations! And yet, it is eminently readable, especially in the e-book format where the act of picking up a book of this size does not remind you of visits to the gym :)

The book covers a wide canvas. Starting from the oldest records of those who ventured out to explore the seas and oceans, all the way to the obsessive search for trading opportunities and power-play between countries that marks our relations with the not-so-boundless seas today.

I particularly enjoyed reading the sections on Polynesian navigators and explorers, trade during the Harappan period; the spread of Buddhism by sea; the Cholas, and the spread of Omanis deep into southern coasts of Africa. Towards the end, details of the arrival of the Europeans on the scene, and their depredations in Africa, the Americas and Asia makes for depressing reading. 

At the end one has to admit that if it were not for the bloody competition between the European powers that completely transformed the world through slave-trading and migrations, the world would have been a completely different place. 

-------------------------------------------------

LINKS & REFERENCES

* 2021 Suez Obstruction - https://en.wikipedia.org/wiki/2021_Suez_Canal_obstruction

* 

Food Aid, Trade and WTO

It is a strange world.

There is enough farmland producing more than enough surplus food to feed each and every child and adult in every country in the world, year after year. And yet, what is actually happening is that many countries that produce surpluses actively seek to undermine local farming systems, and to turn entire countries dependent on hand-outs.

It is called the Law of Comparative Advantage. On the face of it this law, based on a theory David Ricardo published in 1817, makes perfect sense. However, in the real world of natural and man-made disasters, it plays out rather differently. Consider these cases -

• Malawi: In the early 2000s, Malawi faced severe food shortages. Enthusiastic food aid donors over-reacted to a projected 600,000-tonne food deficit, and sent close to 600,000 tonnes of food in aid. However, commercial and informal importers brought in an additional 350,000–500,000 tonnes. Malawi was flooded and had very large carry-over stocks. Maize prices dropped from $250 per tonne to $100 per tonne in the course of a year. Local production of maize, cassava, and rice fell markedly, and in a larger disaster that played out subsequently, estimated losses to the Malawian economy were approximately $15m.
• The Philippines: US PL 480 food aid was used to finance the purchase of US exports. Ten years later, the Philippines was the largest market for US high-protein soybean meal, with US exporters accounting for 90 per cent of total imports.
• India: In India the same PL480 scheme resulted in the creation of one of its finest engineering schools. India was required to pay for the food aid in Rupees (plus 50% of ocean freight cost) which was deposited to the account of the US Technical Cooperation Mission in India. These funds were to be spent on programmes approved by Government of India. One of these schemes, guided by PK Kelkar, was used to obtain US expertise in building IIT Kanpur.

According to a study by the OECD, shipping food from donor countries is 33 per cent more expensive than buying it from a third-party country (usually closer to the destination) and 46 per cent more expensive than buying it locally in the destination country. And yet this is exactly what happens on a fairly regular basis.

The WTO has been trying to do its bit but the opposition is formidable. The Doha Round negotiations took this up in light of evidence that the USA sometimes uses food aid to dump agricultural surpluses and to attempt to create new markets for its exports. Nothing came of it - successful  manoeuvring ensured the removal of the clause prohibiting surplus disposal via food aid.

While food aid continues to save millions of people in Sudan, Syria and Afghanistan from starvation, preventing such aid from destroying local production systems, and creating dependencies continues to be a challenge..

----------------------------------
LINKS & REFERENCES

* Narayanan (1960): India-US Food Agreement and State Trading in Food Grains, EPW -https://www.epw.in/system/files/pdf/1960_12/39/indous_food_agreementand_state_trading_in_foodgrains.pdf

* The Kanpur Indi-American Program (1962-72) - https://www.iitk.ac.in/doaa/convocation/data/KIAP_Report.pdf

Lighting up a Blind Spot in the East

Most South Indian middle-class families have a Burma connection. One that goes back a gneration of two when the country was an attractive destination for young men seeking employment, and for traders trying to make their fortunes.

Perhaps the first time I heard about the country was at the home of a family friend in Hyderabad in the mid 1970s. This gentleman had a large, framed picture of the magnificent Shwedagon Pagoda in his drawing room, as well as intricately woven baskets made of bamboo, mementos from his frequent visits to Rangoon.

Then there were books that told you about the country's past - Amitav Ghosh's "The Glass Palace" and the Ibis Trilogy. Short stories by George Orwell, references to the World War in books by Japanese authors, Michio Takeyama and Haruki Murakami.

What about Burma after it became Mynamar? The whole country seems to have slipped into some kind of blind-spot with hardly any news coming in directly. Nothing much except for the occasional news-stories from Western magazines about of Aung Sang Suu Kyi,  and the ongoing Rohingya refugee crisis. It was a big blind spot waiting to be filled and I was pleased to get hold of a book by Burmese born author and diplomat, Thant Myint-U.

Myint-U's book "Where China Meets India" is bit like walking across the street to visit a reticent neighbour, and realising that you own house looks so different from the other side! You are reminded that parts of your own house belonged to them not so long ago, and vice versa. The Burmans once ruled over the Assam valley, and kings of tiny Manipur once invaded and subjugated the rulers of Mandalay.

China too looks like a completely different country when viewed through the eyes of a neighbour.  I learnt, for instance, that Yunnan, the Chinese province bordering Myanmar is as ethnically diverse, with a per-capital GDP which is among the lowest in China. Over the past few decades, China's Western Development Strategy seeks to remedy this disparity by connecting its poorest, land-locked provinces to the sea, through Myanmar.

Getting all the local tribes and communities - most of them mutually hostile - was certainly not easy. The process of assimilating non-Han Chinese has been a work-in-progress for the past 1000 years or more. The Yao were brought to heel in the 1450s in a war in which the Chinese killed 7300 and took as many, or more, PoWs; The Miao lost out in the Battle of Mount Leigong in 1726 where more than 10,000 Miao had their heads chopped off  and 400,000 starved to death; Ditto for the Buyu in 1797. And then there are groups like the Naxi who owe their musical skills to a band left behind by the Mongol invader, Kublai Khan. Another community which has managed to keep its traditions is the Musuo people living north of Lijiang. Among the matrilineal Musuo,  women are strong and dominant, engaging in 'walking marriages', very similar to the "Sambandham" system practiced by Nairs of Kerala.

A lot of water has flowed down the Irrawaddy since then. Burma is now Myanmar, its capital has moved from Mandalay and Rangoon to a newly purpose-built capital city of Naypyidaw. After years of international sanctions trade is on the upswing, and the country is trying to lower its dependence on China.

Perhaps the day is not far off when we too can drive across from Guwahati to Mandalay, or just take a ferry from Kolkata to Yangon/Rangoon.

-----------------------------
LINKS & REFERENCES

* Myint-U, Thant (2011): WHERE CHINA MEETS INDIA - Burma and the New Crossroads of Asia, Faber and Faber, 2012 URL - https://www.goodreads.com/en/book/show/12151572-where-china-meets-india

* Literature - Japanese connection - https://www.mmtimes.com/news/literary-sun-rising-over-golden-land.html

* Wiki - https://en.wikipedia.org/wiki/Myanmar










=============================

* Myint-U, Thant (2011): WHERE CHINA MEETS INDIA - Burma and the New Crossroads of Asia, Faber and Faber, 2012

-----link-----
https://www.goodreads.com/en/book/show/12151572-where-china-meets-india

An Appetite for Steel

Recent newspaper headlines proclaimed that India is now poised to overtake Japan as the “second largest producer of steel in the world”. This sounds quite impressive - until you see the numbers in perspective. The largest producer of steel in the world - China - produces over 800 million metric tonnes (mmt) while India’s 'record production' was less the 90 mmt in 2015.

The current situation is like that of a huge kitchen that needs to keep itself busy. Excess production capacity is now at odds with low appetite. Over the past 40 years there has been a massive increase in global steel production - especially in China. A country that produced just 37 million metric tonnes (mmt) in 1980 produced more than 21 times that amount - 803 mmt in 2015!

Similarly, on a much more modest scale, India which had been producing 9.5 mmt in 1980 , increased its production to about 90 mmt in 2015.

China’s domestic appetite has been a bit satiated now, so now we are seeing a sharp increase in its steel exports. As with numerous other Chinese products its prices are super competitive, and this is triggering “anti-dumping” measures from other countries, including India. About two years ago, India’s DGFT set a Minimum Import Price (MIP) for 66 types of iron and steel products, while at the same time, imposed duties up to 20% on a number of steel products.

The main countries affected by these measures were China, South Korea and Japan, which accounted for 63.6% of total imported steel volume, and 54.6% in terms of value. As expected, Chinese imports are the largest at over 37%.

Yet, strangely, it is not China or South Korea, but Japan that is at the forefront of the campaign against the restrictions imposed by India. It has threatened to take India to WTO over the import restrictions, and various interpretations of the provisions of GATT 1994 and the Agreement on Safeguards.

What explains this unusual stance?

Some commentators claim that for Japan, India is  just the proxy country used to fight a larger war against MIPs and other border taxes. According to others, this is just a reflection of political clout wielded by steel exporters in Japan. Either way, one thing is clear - higher steel prices is not good news for downstream industries, or for the consumers who end up paying more for cars and cooking utensils.

Lobbies like the Indian Steel Association (ISA) and their counterparts in Japan will always try their best to influence governments for their own benefit. Ultimately, it is for the government to strike a balance between the long term costs and benefits of bowing to the pressure of industry lobbies. And that, unfortunately, is linked to election funding...

------------------------------------------------------
LINKS & REFERENCES

https://www.investing.com/analysis/india-and-japan-take-their-steel-row-to-the-wto,-but-it%E2%80%99s-really-a-proxy-200173645

(26Jan17-BL) - http://www.thehindubusinessline.com/economy/policy/russia-says-steel-exports-to-india-dipped-by-a-third-due-to-curbs/article9503240.ece

(25Jan17, BT - India to be global no.2 steel producer by 2020) - http://www.businesstoday.in/current/corporate/india-closes-japan-second-largest-steel-producing-country/story/244963.html

Reuters (23Jan17) - http://www.reuters.com/article/us-japan-india-steel-idUSKBN1541DX

Forbes (23Jan17) - http://www.forbes.com/sites/timworstall/2017/01/23/japan-threatens-india-with-wto-action-over-steel-good-it-should-to-benefit-indians/#561e021a53ae

(22Jan17 - Taiwan) -- http://www.thehindubusinessline.com/economy/policy/taiwan-wto/article9496340.ece?ref=relatedNews

Hindu (22Jan17): JAPAN THREATENS TO DRAG INDIA TO WTO ON STEEL AS TRUMP ERA HERALDS TRADE TENSIONS

DGFT Notification on MIP (4Aug16) - http://dgft.gov.in/Exim/2000/NOT/NOT16/noti2016.pdf

(4Dec16, IE) - Indian Steel Association (ISA) for extension of MIP for 6 months - http://indianexpress.com/article/business/business-others/extend-mip-on-steel-products-for-six-months-indian-steel-authority-4409972/

(30Mar16 - VCCircle - Timeline on MIPs) - http://www.vccircle.com/news/engineering/2016/03/30/india-extends-safeguard-duty-steel-imports-till-march-2018l

COKE

* http://asia.nikkei.com/Business/Trends/Japanese-steelmakers-switching-to-lower-grade-raw-materials?page=2
- Japanese steelmakers (Nippon, Sumitomo) use better technology to lower costs. They process cheaper, low grade coke to better quality before replacing 50% of high-grade imported coke...this keeps their steel competitive in the world markets.

(2Dec2016) - http://www.infracircle.in/indias-coke-import-financial-year/
> India imported ~ 3 million tonnes of metallurgical coke in 2015-16 --- of which 2 million was from Chine alone!...Metallurgical coke, a key raw material for the steel sector, is used for smelting iron ore in the blast furnace. Around 0.7 tonne of coke is required to produce 1 tonne of steel and it constitutes 40-50% of the total cost of crude steel.
The government on 25 November imposed anti-dumping duty in the range of $16.29-$25.2 per tonne on imports of low ash metallurgical coke from countries such as China and Australia for a period of five years.

Open Sesame

In an interview reported earlier this week, India's Minister for Commerce and Industry, Ms. Nirmala Sitharaman, requested Japan to take steps to increase Indian exports to Japan of sesame seeds, Surimi fish and generic drugs.

This was quite puzzling. Why were two specific items - "sesame seeds" and "Surimi fish" - mentioned in the same breath as Generic Drugs, which is a whole category in itself?

Perhaps it had something to do with the commercial value of the items being imported by Japan...

Sure enough, it turns out that Japan is one of the world’s largest importers of sesame seeds. It is mainly sourced from African countries. Nigeria is, by far, the biggest source, accounting for 28% all sesame seed imports valued at about JPY 11.4 billion (USD 96 million or INR 656 Crores in 2014). This means that Japan imports seeds worth about USD 343 million annually!

In recent years, India too has seen a sharp rise in sesame seed production. In 2014-15, over 0.43 million tonnes was produced, mainly in Gujarat and Uttar Pradesh. However India has not had much success in exporting the seeds to Japan. This is apparently because of high pesticide residue levels.

In other words, it is India that needs to take adequate steps to ensure that the sesame seeds it produces, is not only cost competitive, but also meets phytosanitary standards in the export markets.

The second item - Surimi fish - . I had heard of "Surmai" (Indo-Pacific Mackarel) but not this one.

It turns out that Surimi not a type of fish but something that Japan exports to other countries - especially USA. It is the term used for  "minced fish paste, made from a cheap fish in abundant supply, usually Alaskan pollock, frequently mixed with sugar and sorbitol, a sweetener. The paste is combined with other varieties of fish and fish flavorings, preservatives such as sodium tripolyphosphate and binders such as wheat flour or egg white, and then restructured and colored to look like higher- priced crab, scallops, shrimp or lobster." 

So, is this a case of a minister who was not properly briefed, or was it the IANS/Business Standard reporter who misquoted what has actually transpired?

Either way this is a fine example of the cross-talk, and communication gaps, not only within India, but also between the two countries.


----------------------------------
REFERENCES & LINKS

* BS (2017) - http://www.business-standard.com/article/news-ians/india-japan-fta-implementation-needs-to-be-expedited-sitharaman-117011000351_1.html

* Surimi exports from Japan to USA - http://www.nytimes.com/1984/07/25/garden/surimi-what-kind-of-seafood-is-it.html?pagewanted=all
* (BS, 2014) - Sesame production in India - http://www.business-standard.com/article/markets/india-s-sesame-seed-output-to-rise-by-126-shefexil-114110200688_1.html

* BS (2016) - http://www.business-standard.com/article/news-ians/sitharaman-urges-firms-to-exploit-free-trade-accord-with-japan-116100600675_1.html

* CEPA - RIS Report 2016

* Mint (2014) - http://www.livemint.com/Politics/Nv3BR8VYZ9zLJwwGeFAlWJ/EU-team-to-inspect-sesameseedprocessing-units.html

* SHEFEXIL - http://www.shellacepc.com/
-  About Sesame seeds - http://www.shellacepc.com/products/sesame-seeds/

* IARI - All India Network Project on Pesticide Residues - http://www.iari.res.in/?option=com_content&view=article&id=185&Itemid=531

India-Japan: Poised for Partnership and Waiting...

If there is a code that needs to be cracked, it is the enigma of India-Japan relations.

In a recent discussion with a retired Indian diplomat, one angle of this enigma was articulated - "For more than three decades now, there has been no doubt in the Japanese government about where they want the India-Japan relations to go, and they have almost always stood by us: Construction of Bombay High, 1991 Forex Rescue, Maruti-Suzuki, and Delhi Metro...Somehow, we Indians seem to have always fallen short of our own expectations."

So, as with a cart which has one one wheel moving faster than the other, we seem to be going round and round, in slow, large circles.

Over the years, there has been no dearth of grand promises -- A network of 12 Japan Industrial Townships across India; A Dedicated Freight Corridor flanked on either side by smart new industrial cities stretching all the way from New Delhi to Mumbai; There has been talk of greater defence cooperation, including the supply of Japanese amphibious aircraft (US2), to the Indian Navy; A deal paving the way to "clean" N-power; ...and yet, for all those bilateral declarations, and lofty commitments, there is precious little to show on the ground.

What explains this yawning gap between intent and action?

A recent book by Rohan Mukherjee and Anthony Yazaki (Oxford, 2016), titled "Poised for Partnership", seems to be analysing some of these issues.with the seriousness it deserves.

Mukherjee and Yazaki see a recurrent pattern where "lofty commitments of increased cooperation were often not matched by sufficient attention to the minutiae of how such promises would be turned into reality."

The reviews look good but the pricetag seems rather forbidding. I wonder in which library I could get my hands on a copy of this book.

------------------------------------------------------
REFERENCES & LINKS

* Book Review - Business Standard India - http://www.business-standard.com/article/opinion/india-japan-poised-for-a-great-leap-forward-116041301148_1.html
* Anthony Yazaki -  http://cpr.unu.edu/author/yazaki
* Rohan Mukherjee - http://scholar.princeton.edu/rmukherj/home
* Chapter-I - https://scholar.princeton.edu/sites/default/files/rmukherj/files/mukherjee_and_yazaki_-_poised_for_partnership_-_chapter_1_introduction_0.pdf 

* http://www.vccircle.com/news/finance/2016/04/08/india-looks-japan-achieve-its-disinvestment-targets
* Fitzpatrick, Michael (2015):  Why is hi-tech Japan using cassette tapes and faxes? BBC Business, URL - http://www.bbc.com/news/business-34667380
* http://dinakarr.blogspot.in/2014/01/india-japan-looking-into-hazy-skies.html
* http://dinakarr.blogspot.in/2010/09/rare-earths-vs-common-sense.html grin emoticon

Open Sesame!

Long ago, when 40 thieves decided to hide their treasure in a cave, the chosen password was "Open Sesame!"

Unfortunately they were rather lax in their security protocols and Ali Baba ran away with all the gold. But a question still hangs in the empty cave, and in my mind - why did they choose the name of a tiny oil seed?

In today's world of international trade, sesame still holds the secret to a treasure trove. Consider this -

• Until recently, India was the biggest exporter of sesame seeds (now Myanmar is top dog)
• Japan still holds the record for the biggest importer in the world.
• Sesame can grow in places where most other crops fail, and yet it has the highest oil-contents of any seed.

The North Indian market is dominated by the white colored sesame while, in in the South, the most commonly available variety is the black one. Ditto for South East Asia and Japan. Why so?

 

-------------------------------------------------

LINKS

* (BS-2No14) - http://www.business-standard.com/article/markets/india-s-sesame-seed-output-to-rise-by-126-shefexil-114110200688_1.html

* Sesame on Wiki - http://en.wikipedia.org/wiki/Sesame

Going Bananas

A recent article in the EPW, titled "GM Crops and Global Trade" points out that - "one company controls two-thirds of banana germ plasm of the world, four companies have 30% global market of seeds, and just six multinationals account for 77% of the pesticide market."

This got me curious.

How is it possible for one company to control two-thirds of banana germplasm? Does this mean that it has a hold over the myriad banana varieties dangling at a fruit-vendor's stall in Kerala?

If something seems out of place, it probably is.

According to the International Musa Germplasm Transit Center (ITC-Belgium), the center is "home to the world’s largest collection of banana (Musa) germplasm". ITC has over 1400 sample of edible and wild species of banana, cryo-preserved at -196C. Most importantly, it is not owned by any company and is therefore "freely available for international distribution upon request".

Perhaps the EPW article meant to convey that two-thirds of banana trade is controlled by one company. But even this is contrary to a recent FAO report which states -

FAO's review of the three largest banana traders (Chiquita, Dole and Del Monte), shows that the combined market share of the top three companies was at its highest the 1980's, when they controlled almost two-thirds (65.3 percent) of global banana exports, while in 2013, their market share was slightly over one-third (36.6 percent).

The global banana market is worth US$ 7 billion. Amazingly, nearly all the trading happens in only one variety of banana: Yellow-skin Cavendish.

Contrast this with the amazing variety of bananas available in South India. Even the humblest fruit-seller would have on display, at least five different types of the fruit on any given day. India's National Horticulture Board lists more than 11 varieties of banana including - Robusta, Rasthali, Poovan, Nendran, Red-Banana (Kappa Pazham), Virupakshi, Panchanadan, Monthan and Karpuravalli!

So, far from controlling two-thirds of banana germplasm, the MNCs have only focused one single variety. It is as though all the florists in the world were stocking only roses or as though all the eateries were serving just burgers.

This also one reason why the supermarkets will never overrun the local  kirana shops and chaya-kada's -- they just cannot offer ten different types of bananas!


-------------------------------------------

REFERENCES & LINKS:

* Singh, Sukhpal (2014): GM CROPS AND GLOBAL TRADE, EPW, 18 October 2014 -- http://www.epw.in/commentary/gm-crops-and-global-agri-trade.html

* ITC Belgium - http://www.bioversityinternational.org/research-portfolio/conservation-use-of-bananas-tree-crops/international-musa-germplasm-transit-centre/

* (Reuters, 27 OCt 2914) -- http://www.reuters.com/article/2014/10/27/us-chiquita-brands-m-a-cutrale-safra-idUSKBN0IG16J20141027

* FAO - The Changing Face of Global Banana Trade - http://www.fao.org/news/story/en/item/224807/icode/

- FAO Full Report (2014) - http://www.fao.org/docrep/019/i3746e/i3746e.pdf

* CGIAR - http://cropgenebank.sgrp.cgiar.org/images/file/procedures/collecting2011/Chapter3-2011.pdf

* National Horticulture Board (NH‌B), India - Banana Varieties - http://nhb.gov.in/fruits/banana/ban013.pdf

Wiki - http://en.wikipedia.org/wiki/Banana
- Enset - http://en.wikipedia.org/wiki/Ensete_ventricosum -- 'False Banana' grown in Ethiopia for its edible roots!

Tussar Silkworms

In early morning sunlight, a Tussar silkworm is an incredibly beautiful sight.

The surprising thing is that despite its large size, you are likely to miss it completely, until you notice that during the Autumn season, some trees have been stripped of all their leaves. 

Tussar silkworms come in shades of green that blend perfectly into the foliage of Arjuna trees (Terminalia arjuna). If the color does not fool you, it also has a'twig' color-band along its sides. And like one of those fancy trailer trucks on our highways, it has a string of orange 'lights' running the length of its body!

Do these 'lights' serve some purpose? I've been scouring the net for more information but nothing has turned up so far..

Tussar silk ("Kosa" in Sanskrit), alongside Eri and Muga, happen to be some of the earliest non-plant fibers adopted in India. Yet, it is surprising to see so little information available on Google Scholar about their origins either as traded goods, or in terms of entomological studies. 

--------------------------------------------------

LINKS:

- Fiber Stories -- http://www.naturalfibres2009.org/en/stories/silk.html

- Tussar Silk -- http://www.utsavpedia.com/textiles/tussar-silk-the-story-of-wild-silk/

- http://www.copperwiki.org/index.php?title=Tussar_Silk

- Prasad, Mahesh (2011): INDIA'S FOREIGN TRADE - FROM ANTIQUITY TO DATE, Google books -- http://books.google.co.in/books?hl=en&lr=&id=P2KyHFkBh9EC&oi=fnd&pg=PA7&dq=tussar+silk+history&ots=vyC6nfgeJ-&sig=Z44Gn6GuQZ-ORB2wezi_dTWAYfI#v=onepage&q&f=false

- Wardle, Thomas (1880): Wild Silks of India - Principally Tusser -- Google Books -- http://books.google.co.in/books?hl=en&lr=&id=24kIAAAAQAAJ&oi=fnd&pg=PA1&dq=tussar+silk+history&ots=6NVQ3DvL6V&sig=cB9NwpJ_P1nsZt1AX9N-RlWqnxk#v=onepage&q&f=false

- Kosa Silk -- http://www.utsavpedia.com/textiles/kosa-silk-the-heritage-of-chattisgarh/

* 10 most toxic caterpillars -- http://www.environmentalgraffiti.com/nature/news-ten-creepy-and-colorful-caterpillar-hazardous-human-health?image=0

Udon in India's Spaghetti Bowl

In the spaghetti bowl of international trade agreements, India's plate seems to be garnised very 'comprehensively'. We have comprehensive partnerships, comprehensive cooperation, and then those that sit on the fence between cooperation and partnership!

The word seems to be a favorite with governments. But if examined its usage a little more closely, it turns out that even though it sounds very decisive and all-encompassing they don't really mean it.

CECA involves only 'cooperation' towards tariff reduction in a phased manner on all items except those on the 'negative list' and tariff quota rate (TQR) items. On the other hand, the 'partnership' in a CEPA is extra-comprehensive, so it also covers trade in services and investment. 

Here is a summary of such trade agreements from the website of the Ministry of Commerce & Industry (MoCI) and other sources:

• Comprehensive Economic Partnership Agreement (CEPA) - Sri Lanka (2000); Singapore (2005); Korea (2009); Japan (2011);  Negotiations on with Canada
• Comprehensive Economic Cooperation Agreement (CECA)  - Thailand (2001), Singapore (2005), Negotiations on with Australia, Indonesia
• Comprehensive Economic Cooperation and Partnership Agreement (CECPA) negotiations - Mauritius
• Preferential Trade Agreement (PTA) - Chile (2005); Negotiations on with South African Customs Union (SACU), MERCOSUR
• Free Trade Agreement (FTA) negotiations - New Zealand, ASEAN, Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Gulf Cooperation Council (GCC)
• Trade Agreements - Pakistan

The most recent CEPA signed between India and Japan is perhaps a case of adding udon to the spaghetti bowl of trade agreements. The pact is expected to provide access to the $5-trillion-GDP Japanese market. It is also the first CEPA with a developed country. About 94% of the tariffs between Japan and India will be eliminated within 10 years (about 97% by Japan and about 90% by India) on a trade value basis.

Given the ongoing recession and slowdown, it is still too early to know if the agreement between both government's will actually lead to a boost in bilateral trade.

----------------------------------------------------------------
LINKS / REFERENCES

* Dhar, Biswajit (2011): All that the India-Japan CEPA Promises, FT 9 Sep 11, URL - http://www.financialexpress.com/news/all-that-the-indiajapan-cepa-promises/843865/0

* Raghavan, BK (2011): India-Japan CEPA holds great promise, BL 7 Sep 2011, URL - http://www.thehindubusinessline.com/opinion/columns/b-s-raghavan/article2430062.ece

* India-Japan Cepa comes into force on August 1 - HUMA SIDDIQUI, FT 30 Jul 2011 URL - http://www.financialexpress.com/news/indiajapan-cepa-comes-into-force-on-august-1/824406/0

* India-Korea CEPA - http://www.aepcindia.com/files/INDIA-KOREA-CEPA-Website.pdf

* PTI (2011): Ministry team to explain FTA benefits to stakeholders, BL 21 Feb 2011, URL - http://www.thehindubusinessline.com/industry-and-economy/economy/article1477059.ece?homepage=true

* India - Trade Agreements - http://en.reingex.com/India-Free-Trade-Agreements.shtml

* http://www.gktoday.in/bankpo-question-answers/what-is-difference-between-ceca-and-cepa/
* http://www.differencebetween.com/difference-between-ceca-and-vs-cepa/

* Update on India's Foreign Trade - URL - http://commerce.nic.in/tradestats/Indiastrade_press.pdf
* System on Foreign Trade Performance Analysis (FTPA) - http://commerce.nic.in/ftpa/default.asp

* Dept. of Commerce, MoCI-India, URL - http://commerce.nic.in/trade/international_ta_current_details.asp

Yet Another Summit Meeting

The Japanese Prime Minister, Noda, visited India this week. As usual, there was much talk about boosting trade, technology transfer and maintaining high levels of ODA assistance for infrastructure projects. Despite all the special reports, exclusive interviews and sound-bites, there seems to be little evidence of any real change in the bilateral equation.

When the dust settles down one hard fact will still remain: Japan-India trade stands at $15 billion while Sino-Japan trade is chugging on at $340 billion per year.

Why is there such a huge gap between the rhetoric and reality? A part of the answer perhaps lies in the completely unrealistic expectations with which Indian's approach the Japanese. Take for instance, India's desire to obtain advanced technologies from Japan. On 28 Dec., an Indian Express report on bullet trains headline said, 'Japan Says Will Provide Latest Technology'. The crux of the report was a quote by one Toshihiro Yamakoshi, Director, Office of Project Development, Japan's transport ministry, who is aparantly stated, 'Japan would be offering the necessary technology' for the six corridors that India is planning to develop.

A transport ministry offers technology that does not belong to it and the report claims that Japan 'will provide latest technology'. This might have made some sense if the reporter was quoting a Soviet official in the erstwhile USSR. But Japan is not USSR and neither companies not technologies belong to the government to do as they please.

The Chinese officials understood this simple fact a couple of decades ago and focussed their attention, not on the MITI officials, but on Japanese companies that needed cheap labor and access to markets. They delivered what was promised in meetings, played transnationals against each other and, over the years,  built-up their own companies as formidable competitors.

At the end of this prime-ministerial visit, Indian politicians and bureaucrats will no doubt pat each other on the backs and hope that the private sector will  take a cue from the high-level discussions and "do the needful" - until the next summit meeting.

---------------------------------------------------------------

REFERENCES / LINKS

• Dashtidar, Avishek G and Shubhajit Roy (2011): JAPAN SAYS WILL PROVIDE LATEST TECH, Indian Express, 28 Dec 11, p7
• Garia, Nikita (2011): What They Said: Japanese Prime Minister's Visit, 31 Dec. 2011, URL -  http://blogs.wsj.com/indiarealtime/2011/12/31/what-they-said-japanese-prime-ministers-india-visit/
• Edit IE (2011): LIFTING THE GAME, IE 28 Dec 11, p10
• ENS Bureau (2011): JAPAN MAY INVEST $4.5bn IN DELHI-MUMBAI CORRIDOR, IE 28 Dec 11 p16

* Joint Forum of Indian and Japanese CEOs - Joint Report (28 December 2011) - http://www.keidanren.or.jp/english/policy/2011/116.html

The Cashew Paradox

.
In the world of globally traded nuts (cashew nut, Brazil nut, hazel nut, walnut, almond) cashew-nuts occupy a prominent place,  accounting for nearly 20% of total trade by weight. 

Originally from South America, global production of this commodity is now dominated by Vietnam, India, Brazil and a few West African countries.

India, despite being the largest processor & exporter of cashew nuts at 4.5 million cartons (nearly double that of Vietnam at 2.3 m), is a laggard when it comes to technical innovations that would define the business in the years to come. One of the most critical elements in the processing industry has traditionally been the highly skilled, labor-intensive task of shelling and peeling cashews.

With its numerous R&D centers aimed specifically at agro-processing industry, one would have expected to see cashew shelling & peeling machines to emerge from India. Instead, what we are seeing now is that the most cost-effective machines are being imported to India, not from one of the industrially advanced countries, but from Vietnam!

What is it about Vietnam that is making it a leading innovator, as well as a formidable competitor in the agri-commodities trade?

-------------------------------------------------------------------
LINKS / REFERENCES

• Cashew Processing Machine: http://vn.countrysearch.tradekey.com/cashew-peeling-machine.htm
• Si Chuan Co - http://www.scuic.com/cashew-shelling-machine.html?gclid=CJDt67asy6kCFcwa6wodNRBCLw
• Indian demand fuels African cashew trade (Kate Thomas,28 July, 2010, This is Africa) - http://www.thisisafricaonline.com/news/fullstory.php/aid/212/Indian_demand_fuels_African_cashew_trade.html 
• Cashew trade mellows on waning demand (G K Nair, HinduBL, 28 Apr., 2011) - http://www.thehindubusinessline.com/markets/commodities/article1818948.ece
• Food Museum - Cashew - http://www.foodmuseum.com/cashew.html
• Cashew Trade Overview - http://indiancashews.in/cashews
• Cashew Export Promotion Council India - http://www.cashewindia.org/
• CRN India - Commodities Trade - http://www.crnindia.com/commodity/cashew.html
• Africa Biz Online - http://businessafrica.net/africabiz/cashew.php

India-Japan CEPA

A few months ago at ADBI Tokyo, an interesting discussion had come up on the merits of bilateral trade agreements. The question was: do trade agreements between two government really have an impact on trade ? The answer was not too flattering for governments... apparently FTA's and CEPA's have only a marginal impact business and trade decisions in the Asian region.

It is nearly four months since a Comprehensive Economic Partnership Agreement was signed between India and Japan (16 Feb., 2011). This was the second such agreement India signed with any developed country (Singapore was the first), and the outcome of five years of negotiations. It is expected to boost bilateral trade from the current level of $10.3 billion to $25 billion by 2014.

Is the India-Japan CEPA translating into an increase in trade between the two countries?

-------------------------------------------
LINKS:

* Ranjan, Prabhash (2011). INDO-JAPAN CEPA AND SOVEREIGNTY ISSUES. Financial Express, 31 March 2011
* Sharma, Anand (2011). INDIA-JAPAN SIGNS CEPA - TO GIVE IMPETUS TO TRADE AND INVESTMENTS. DARE, 17 Feb 2011
* FE Bureau (2011). INDIA-JAPAN CEPA TO BOOKST BILATRAL TRADE TO $25 BILLION. Financial Express, 17 Feb 2011
* India's Foreign Trade (Ministry of Commerce & Industry, India): February 2011,  March 2011,
* Official Press Release (MoCI): 16 Feb 2011 - http://commerce.nic.in/pressrelease/pressrelease_detail.asp?id=2732
* World Bank: India's Trade Policy - http://go.worldbank.org/RJEB2JGTC0

India's Ban on Japanese Food Imports

India's food imports from Japan have been relatively insignificant. But on 5 April 2011,  India became the first country to suspended all Japanese food imports. This ban was to be reviewed after three months but within two days of announcement, the government did a U-turn and reversed the decision. What explains this unseemly hurry to impose a meaningless ban, and then to revoke it?

By all accounts, this seems to yet another case of the right hand not knowing that the left hand is up to, within the government of India. The ban seems to have been declared by the Ministry of Health after receiving inputs from the Food Safety and Standards Authority of India, Board of Radiation & Isotope Technology, Bhabha Atomic Research Centre (BARC), Atomic Energy Regulatory Board and the Indian Institute of Toxicology Research.

Since the Ministry of Trade had not been consulted, it promptly issued a notice rejecting the Health Ministry order. It insisted - perhaps quite rightly - that a blanket ban was unwarranted and that it would merely ask for some extra paperwork (radiation-free certification) from the importers.

At the end of the day, it is the government of India that stood exposed for the incompetence of its senior bureaucrats.

--------------------------------------------------------------

India bans food import from Japan for 3 months (The Hindu, 6 APr., 2011). http://www.thehindubusinessline.com/industry-and-economy/article1602611.ece

India Ban on Food Imports from Japan - Economist - http://www.economist.com/node/18530743

India Bans Japan Food Imports (Reuters, 5 Apr 2011) - http://online.wsj.com/article/SB10001424052748703806304576244633790290812.html

India U-turn on Japan food import ban(MB)  http://www.mb.com.ph/articles/313340/india-uturn-japan-food-import-ban

India does a U-Turn (Sky News, 8 April 2011). http://www.skynews.com.au/businessnews/article.aspx?id=599029&vId= 

Shikata,Takagi,Takashima & Karaki, "Japanese Food Safety Concern: Fact and Fiction" (FCCJ, 11 May 2011) http://www.fccj.or.jp/node/6577

C for Chocolates

.
Out in the markets today, florists and chocolate shops were seen doing brisk business...tomorrow, after all, belongs to them - its Valentines Day.

The rush for tiny bits of sweets packaged like jewelery brings to mind a nagging old question: why is it that West Africa produces over 70% of the worlds' cocoa, and yet, it is the Swiss and Belgians who take all the credit for making the finest chocolates?

In 1957, when Gold Coast became an independent country called Ghana, it supplied two-thirds of world cocoa. Today the largest exporter is another West African country - Côte d'Ivoire - but still, Ghana continues to hold the second position at 379,000 tonnes (1997/98). And the irony is that even while companies like Meiji-Japan maintain a brand-line of chocolates named "Ghana", its customers are assured (on the wrappers) that a fraction of the retail-price is being sent back to Ghana... as charity.

Why does the second-largest producer of cocoa need charity from chocolate manufacturers?

A part of the answer is that cocoa producing countries are poorly governed, leaving their agriculture-commodity traders rather disorganized. Gervase (2000) points out that it was the planters in tropics who did the most to reduce returns from cocoa exports, through misguided attempts to force up prices in the short term.Their governments worsened the problem through harmful policies which included:

...failing to protect the forest, favoring estates, allowing labor coercion, discouraging savings, restricting immigration, allowing cartels, and interfering in marketing. Over and above all this, many governments taxed heavily and indiscriminately, while failing to provide essential public goods.

Ghana, in fact, figures as a typical case where, in addition to all the above problems, ethnic and tribal rivalries (Akan-Ashanti) killed the proverbial goose that laid golden eggs. Now the country just figures on chocolate wrappers while international commodity traders rake in all the profits.

-----------------------------------------------
REFERENCES / LINKS

• Federation of Cocoa Commerce - http://www.cocoafederation.com/education/produce.jsp
• Easterly, William (2002). The Elusive Quest for Growth (MIT Press)
• International Cocoa Organization (ICO) - http://www.icco.org/
• Gervase, William Smith-Clarence (2000). Cocoa and Chocolate, 1765-1914, Routledge-London (preview on Google Books)
• World Bank - Ashanti Region Cocoa Project (2000)
• Richard Asante & E.Gyimah-Boadi (2004). Ethnic Structure, Inequality and Governance of the Public Sector in Ghana. UNRISD.
• Fair-Trade International - Cocoa. http://www.fairtrade.net/cocoa.html

Lipsius, Grotius & International Law

.
Today evening, I was walking down the 3K corridor for a cup of coffee when I heard the words "East India Company" and "International Law" from one of the classrooms. Prof. Klienschimdt was halfway through one of his sessions, and I wondered if I could just drop in... The lecture sounded really interesting, so I slowly sneaked in (nothing ventured, nothing gained!) and settled on one of the  rear seats.

On the boards, there was ample evidence that the session had been on for a while. On one side there was a list of trading stations along the coast of Africa, South Asia (Goa, Daman, Diu) and East Asia (Malacca), and, on the other, names of European kings of the late 1500s and early 1600s - Philip-II of Spain (aka Philip-I of Portugal), the House of Orange (Holland) and Elizabeth-I of England. The discussion had now reached an interesting juncture: how did little Holland manage to win the trade wars against the big boys - Spain & Portugal?

A part of the answer, apparantly, lay in the University of Lieden (est.1575!). Here, a professor named Justus Lispius (1547-1606) wrote two best-sellers that were to form the bedrock of Dutch pragmatism, as well as International Law and the Modern State. The two books - On Constancy and Politics - put forth, for the first time, a set of guiding principles that was not based on religious texts. These guiding principles (Natural Law) essentially said that any action should be such that its rationale is self-evident, without the need for enforcement by external agents.

The practical outcome of this was that while Spain and Portugal looked up to the Church for legitimacy, approval and guidance, the Dutch were driven purely by profits. Any trade venture that yielded less than 400% profit was not worth the trouble.

So, when the Tokugawa Shogunate in Japan imposed a simple condition on the European traders ("don't mix trade and religion"), the Spanish and Portuguese opted out while the Dutch landed a monoply for the next 100 years! The Dutch quietly raked in the profits by following the rules set by the Shogunate, but while their ships were on the open seas, they followed the "Free Seas" (Mare Liberum) principle of Hugo Grotius (1583-1645) and stoutly attacked any Spanish blockade.

Both these principles continue to be at the foundation of International Law, in its present form....Now that is someting to think about - over a cup of coffee! :)

.............................................................................
LINKS

• Lipsius - Book of Constancy (I) - http://people.wku.edu/jan.garrett/lipsius1.htm
• Lipsius - Book of Constancy (II) - http://people.wku.edu/jan.garrett/lipsius2.htm
• Philip-II of Spain / Portugal
• Stoicism

Knowledge: Leaks & Plugs

.
In 1979, Daewoo Corporation of South Korea signed a collaborative agreement with Bangladeshi company named Desh Garment Ltd (DGL), in 1979.  This is essentially to evade import quota`s imposed on the Koreans by the Americans and Europeans. Daewoo`s idea was to train 130  Bangladeshi`s to make and sell garments, in return for royalties and sales commissions, amounting to 8% of the sales value.

The project was a grand success...for the Bangladeshis. Within a few years, garment production exploded - from 43,000 shirts in 1980 to 2.3 million in 1987 - thanks, largely to the Daewoo-trained workers who left DGL to start their own enterprises. These enterprises brought in about $2 billion in garment sales by 2000 -- 54% of all Bangladeshi exports.

The output of this industry was so prolific that by 1985, the champions of free-trade in America had slapped an import quota`s on Bangladesh as well.

William Easterly (2002) refers to this as a case of `knowledge leak`, and points out that one of the most important bits of knowledge transferred by Daewoo to the DGL workers, had more to do with the machinery of trade & administration rather than textiles. This included the `Special Bonded Warehouse System` which helped DGL in persuading the government (with a a heavily protectionist trading system) to allow duty-free imports for exporters. Another skill transferred was the procedure for opening back-to-back letters of credit.

But then, is it really a case of knowledge `leaking`? That part of the world had long been a center for the textile industry.  Even in the early 1700s the exports from industry to Europe had triggered prompted arson & riots in England, prompting the then emerging colonial power to pass a law prohibiting imports on one hand, and to promote local industries on the other. The industrial revolution that followed resulted in the flooding of Bengal`s markets with cheap imports, decimating the local textile industry.

One way of looking at the relatively recent surge in production of trade goods in countries like Bangladesh is that the local players are merely learning to play and old game with a newer set of rules...

.............................................................................
REFERENCES / LINKS

• Easterly, William (2002). The Elusive Quest for Growth (pp.146-155)
• Seabrook, Jeremy (2011). An Astonishing Assymetry (Outlook, India, Jan 2011) - http://www.outlookindia.com/printarticle.aspx?270131

Rare Earths vs. Common Sense

.
There has been an interesting new move on the chessboard of world trade & politics.

Advanced economies have been hoping stay ahead by maintaining their lead in innovation & technology; by keeping the know-how and copyrights tightly guarded on one hand, and outsourcing their grunt-work to emerging economies, on the other. It is now turning out that some of the basic raw materials required for hi-tech - the rare earths - can be used as a potent bargaining tool in international trade.

'Rare Earths' is a strange term. They refer to 17 elements of the periodic table that are not actually 'rare'. Some of these elements are a lot more abundant than, say, lead or silver. But, as in the case of all metals, it takes a good deal of effort to excavate, mine and produce them, and what has been happening since 1990 is that China has been positioning itself as the dominant player in the Rare Earth Metals (REM) market.

In 1990 China ramped up its REM production & output from mines & foundries in Inner Mongolia (eg. Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co). Then, over the next twenty years it successfully flooded the world markets with REMs, running most of the other REM producers out of business (in USA, Australia). China now has 97% of the market-share and calls itself the "OPEC of rare earth metals."

The analogy with OPEC and oil is rather apt. Easy availability of REMs has been one reason for the recent spurt in manufacture of more 'eco-friendly' and commercially viable hybrid cars (each Toyota Prius uses 25 pounds of REMs), solar panels, fuel-cells etc., Just when the future of the so-called "green" technology looked promising, China announced that it was cutting down the production of REMs due to "environmental concerns".

Last month China cut its export quotas for rare earth by 72 percent for the second half of this year. Shipments will now be capped at 7,976 metric tons, down from 28,417 tons for the same period a year ago. The sharp decline of the export quota will cause a shortage of around 20,000 tons of rare earth for international users this year.

China is also considering banning the export of yttrium (used in color TV tubes and to halt corrosion in steel), terbium (used in lasers and semi-conductors), and dysprosium (used in high temperature magnets that are required for electric motors in vehicles). Now, as the prices shoot up and the hi-tech companies struggle to survive in a competitive market, China is effectively using REMs as a bargaining tool. The Chinese Ministry of Industry and Information Technology said last week that while China has used a "technology for market" strategy before—offering foreign companies low labor costs and access to its fast-growing market—"now we have the expression 'technology for resources.'

Where does India stand here?

Out of the total world production of 127,000 tonnes (2007), China produced 120,000 tonnes and India, at 2nd postion, produced 1700 tonnes (1.3%). We don't seem to have a significant presence in the manufacture of semiconductors or "green" high-tech goods.

It is also very unlikely that the government-run company Indian Rare Earths Ltd., would have anticipated this move in Chinese Checkers and positioned itself as a alternate source for REMs. The company website itself is outdated, and studded with self-congratulatory messages - "IREL is making profit since 1997-98 with its sales turnover reaching a peak exceeding Rs. 3600 million in 2006-07, with export component of above Rs. 1000 million (~US$ 21m)."

Looking back it does seem that we lacked  the common sense to anticipate and prepare for this opportunity. Perhaps this is what is called "Kupa-manduka Nyaya" in Sanskrit – the rationale of a frog-in-a-well...what a pity! :(

------------------------------------------------------------------

Some REMs and their Uses

• Yttrium - used in color TV tubes and to halt corrosion in steel
• Terbium - used in lasers and semi-conductors
• Dysprosium - used in high temperature magnets that are required for electric motors in vehicles.
• Molybdenum - additive to create specialty steel products.
• Indium – required for products as LCD (liquid crystal display) televisions. Price hike - 8.5 times (2002-2009)
• Tungsten- which is used to make light-bulb filaments and increase the hardness and strength of steel, rose 4.7-fold during the same period.
• Neodymium -
• Europium -
• Cerium -
• Lanthanum -

------------------------------------------------------------------
LINKS / REFERENCES

Rare Metal Mining - http://www.raremetalmining.com/?p=269

China, Japan Debate Restrictions on Rare Earth Exports -- August 30, 2010 People's Daily Online

China Defends Control of Rare Earth Exports as Move to Protect Environment Bloomberg News - Aug 29, 2010 http://www.bloomberg.com/news/2010-08-29/china-defends-control-of-rare-earth-exports-as-move-to-protect-environment.html

China to Globe: “No More Rare Earth” --- Bruce Krasting on 08/29/2010 http://www.zerohedge.com/article/china-globe-%E2%80%9Cno-more-rare-earth%E2%80%9D

China Dangles Rare-Earth Resources to Investors -- WSJ 16 Aug 2010

 http://online.wsj.com/article/SB20001424052748703321004575427050544485366.html

China Corners the Rare Earth Metals Market Anti-competitive Policies may Create Global Monopoly -- Shar Adams -- Epoch Times Aug 31, 2009 http://www.theepochtimes.com/n2/content/view/21812/

Japan goes prospecting for rare metals -- Hisane Masaki 21 Jun 2007 http://www.atimes.com/atimes/japan/if21dh01.html

----------------------------------------------------------------------------

NEWS UPDATES

* Amid Tension, China Blocks Vital Exports to Japan (NYT 22 Sep 2010) - URL - http://www.nytimes.com/2010/09/23/business/global/23rare.html

* Fallout of the Trawler-Crisis on Chinese REM Exports to Japan (25 Sep 2010, Asahi Shimbun)
Prosecutors to release Chinese trawler captain URL - http://www.asahi.com/english/TKY201009240209.html 

...From November, Showa Denko KK will jack up prices fourfold for cerium abrasives used to polish substrates in liquid crystal display panels.

A prolonged ban would have also affected automobile and appliance manufacturers. An executive of a major trading company said Toyota Motor Corp. uses about half of the rare earth imports to Japan for hybrid vehicle motors.

Mitsubishi Motors Corp. plans to double production of the i-MiEV electric vehicle next year, while Nissan Motor Co. will begin selling its Leaf electric vehicle in December. One big fear concerning China's export ban was the supply of cerium, a metal used in LC flat screen TVs, sales of which have been leading Japan's economic recovery.

Tsutomu Toichi, senior managing director and chief executive researcher at the Institute of Energy Economics, Japan, said the fallout from the trawler incident underscores the dangers in depending on a single nation for rare resources. "The government should use this as an opportunity to consider creating a stockpiling structure," Toichi said. Some companies are trying to move away from the dependence on China for rare earth metals. Panasonic Corp. and Sharp Corp. are turning to other materials and developing new technologies.The trading companies Sojitz Corp. and Sumitomo Corp. have heightened efforts to mine rare earth metals in Vietnam and Kazakhstan.

* Japan seeks new options on rare earths (BBC 10 Nov. 2010)
http://www.bbc.co.uk/news/world-asia-pacific-11677802

EU vs. ASEAN

.
"...When you’re asking questions, please be rude and provocative - that will help me learn better!"

This was the first time I head such a plea at a seminar. The speaker was Prof. Kishore Mahbubani from LKYSPP, Singapore, after his session at ADBI-Tokyo on 12 April 2010. The topic -  "The Secret Formula of Asian Regional Cooperation".

Having recently completed a course on "Regional Integration" at Tsukuba-U, the topic was not only interesting but a good opportunity to directly interact with Prof. Mahbubani. I had liked his papers and articles for their gung-ho optimism about Asia and thought it might be worthwhile to travel to Tokyo on a cold, gloomy, rainy day.

I was not at all disappointed.   :-)

Introducing the trends in regional cooperation as a "sunrise industry", Prof. Mahbubani started out by comparing two models - EU and ASEAN. The EU's three greatest strengths, according to him, were that -

• It has succeeded not only in creating a zero-war zone but also enabled a zero-prospect of war in Europe
• Created the most open borders for regional groupings - something that would have been impossible without total trust;
• Replaced 19th century notions of sovereignty with 21st century notions of inter-dependence.

Even though these steps have made EU the 'gold-standard' of regional integration, it had some fundamental defects that are often overlooked by countries eager to replicate it. The EU model is deeply flawed because it is -

• A mono-civilizational entity: EU is open only to Christian Europeans. It exclusion of Turkey underlines the fact that the grouping is out of sync with the real world which happens to be a multi-civilizational entity of 6.8 billion people;
• Political dishonesty is rampant: Disconnect between rhetoric and reality is obvious from the recent fracas over foreign policy, and from the proxy-wars European powers have been fighting in the Balkans and in Africa;
• Economic Dishonesty also rampant: Everybody knew that the Greeks were being dishonest with their data, but nobody wanted to do anything.

ASEAN, on the other hand, is a much more pragmatic, inclusive organization. Where EU is legalistic, formalized and technical, ASEAN places practice ahead of theory: trade links are first nutured and then the agreements and paperwork follow. It is clearly multi-civilizational (Buddhists, Muslims, Christians, Taoists..), reflects the messiness inherent in the regional political fabric.

In the EU model the big boys (France, Germany) decide first and the others follow; in ASEAN, the little guys got together while the big boys (Japan, China) dithered. EU is obsessed with internal challenges (“just like arranging deck chairs on a sinking Titanic”; ERASMUS between similar countries), while ASEAN moves forward on an external focus, using agreements that need not be based on consensus, and using alliances are based on common interests (ASEAN+3, +6, +8).

According to Prof. Mahbubani, three decades on regular ASEAN meetings – and golf camaraderie – have succeeded in building trust in a turbulent region. Other regions like Africa and Latin America may perhaps find ASEAN model more useful than trying to blindly copy the EU model, which is fundamentally flawed in any case.