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2007: Where is the world going
After the 2006 rewind, it�s time to look ahead and make sense of the dominant global and national trends of 2006 � of how these would impact 2007 and beyond. Here is a collection of some distinguished prognosis for the new year.
 
Thu, Dec 21, 2006 00:00:00 IST
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LOOKING BACK AND looking ahead at the end and beginning of a year was never as engrossingly done as now. It reflects how much more complex the world has become in all spheres and the necessity to unravel the future and make sense from disparate and completely compartmentalized happenings. It matters more than ever to know where we are headed in a more composite way. Bearing this in mind, Team Merinews scourged sources to figure out what was going on in different domains to present fragments that put together bring out the future picture more appropriately — even if not fully — than a one-piece self-done article. This compilation made from news, articles, features and columns tries to pin down the still-to-unfold new year of 2007. Together, these small excerpts, though not covering all aspects, still give the direction in which the past trends are detrimentally going. So, here it is: what 2007 means…
 
- For the world economy -
According to 2007: Country By Country, just published by the Economist Intelligence Unit, an upbeat picture for the global economy overall rests largely on exceptionally strong growth in some of the world’s more exotic markets. Booming demand in China and India will also play a key role in offsetting a less exciting performance in developed economies such as the US, Japan and Germany. There are, nevertheless, number of threats that could drag down global economic performance, some stemming from the risk of a sharp correction in the US, others from an uncertain political outlook in many countries.
 
  • The US housing market has already softened, but a sharper than expected fall in property prices during 2007 would threaten to push the economy into recession.
  • There are still risks associated with the Chinese government’s attempts to slow the economy and deal with an investment bubble, especially in the run-up to the 17th Party Congress in October 2007.
  • Geopolitical risk looms large, with worries about Iran’s nuclear ambitions helping drive up oil prices, tensions rising over North Korea’s nuclear brinkmanship and the ongoing terrorist threat.
  • Nuclear programmes in North Korea and Iran pose a serious threat to regional political stability and to the world economy more generally
 
According to the World Bank, sub-Saharan Africa will grow by 5.3 percent, Central Europe by 5.7 percent, India by 7.7 percent and China by 9.6 percent in 2007.
 
- For China & Asia -
Writes William Pesek in Bloomberg: “The year ahead will see China under intense pressure to let its currency rise, even though it is unlikely to do so significantly. It also will be pushed to open its financial sector and clamp down on abuses of intellectual property rights. North Korea may cause many headaches for Communist Party leaders. Finally, China needs to come to terms with how it can compete in the information age while limiting the flow of information. By censoring news offered by the likes of Google.com and Wikipedia.com, China ensures that its best and brightest only know so much about advancements and trends a world away. China must loosen up if it is to encourage innovation and create more domestic growth. There are other themes that are worth keeping an eye on in Asia next year (like) US economic slowdown. Monetary policy, as the late Milton Friedman liked to say, operates with a lag. So far in 2006, the US Federal Reserve Board has added 100 basis points to the overnight lending rate to 5.25 per cent, and those increases are still funneling through the economy. The risk is that a marked US slowdown cripples China, the current regional economic growth anchor. Asia is still too export dependent for its own good, and the year ahead might serve as a reminder.”
 
- For global investors -
A leading market watcher of London, Michael Hughes, is upbeat about world economy. Hughes, who has been the chief investment officer at Baring Asset Management, “which manages $39 billion in institutional and mutual funds” is however worried about easy credit bidding up asset prices around the world. His observations: “The world economy is in the midst of a boom, driven by falling prices for goods and labour, that’s capable of running 5 to 10 more years. The favourable environment has been created by the industrialization of China and India and the greater mobility of capital. Economic leadership next year will shift from the West, and particularly the US, to Asia, Eastern Europe, and parts of Latin America. China stocks will remain good bets. Japanese companies are also a good investment bet, especially in small caps, which are less exposed to the strong yen because they tend to export less. Korea, Thailand, and Vietnam will do well, too, though the best way to play those markets is through diversified equity and bond funds. Commodities continue to be a good bet given the long run of growth. It’s best to use vehicles that offer balanced exposure to oil, precious metals, and industrial metals, rather than funds focused on just oil or gold. What could go wrong is the dollar, which could take a sharp fall and trigger retaliatory action from Europe or Japan, ending the current period of economic stability. With borrowing for everything, from corporate buyouts to houses running at high levels, the risk of a credit market accident that could destabilize the global economy is high. That’s because the US is using a lot of leverage, and many asset classes around the globe are expensive. As a result, the risk of asset price deflation is high.”
 
- For South Korea -
Standard & Poor’s expects South Korea’s economic growth to come in at 4.5 per cent in 2007, down from the 4.9 per cent projected for 2006, because the country will face a range of external and internal negative factors, including a stronger won and high oil prices. The global credit rating agency cites sluggish domestic consumption, the inflated property market and the continued strength of the won as major uncertainties weighing on the economy. Its projection of 4.5 per cent economic growth is the same as the government forecast but higher than those of most other economic institutions. Standard & Poor observes, “The slowdown in the US economy will not have a significant impact on the country, given the world’s largest economy’s stable growth and China’s continued robust expansion. Overall, we expect 2007 to be a good year for Korea even though external factors need to be monitored closely.’’.
 
- For venture capitalists -
What do venture capitalists expect to be doing in 2007? Predictions call for as much investment next year as we’ve seen the past two years. According to a new survey, investment in energy-related companies is projected to increase by more than 90 per cent, while Internet and media-related investments are expected to climb about 70 per cent.
 
- For Open Source -
Writes Neil McAllister in Computerworld: “I couldn’t have an easier time playing fortune-teller this year. While some segments of the IT market might see the future as a wide-open plain, for the open-source community, 2007 is shaping up to be a year for settling unfinished business. If we cross our fingers, we might see the end of at least one chapter. IBM and Novell have the SCO Group on the ropes in their ongoing court case. With any luck, 2007 will finally see the majority of SCO’s arguments laid to rest, ending this frustrating episode for Linux customers and vendors. Don’t assume that means smooth sailing from here on out, though. Microsoft seems determined to renew its PR war against open source with vague patent claims, as evidenced by the recent indemnification pact it signed with Novell.
 
- For Hollywood -
Writes Nikki Finkie in article entitled Orgy of sequels climaxing in 2007: “If you thought 2006 was bad, just wait. In 2007, the studios will give up on birthing blockbusters and concentrate instead on cloning them to knock off lame sequel after lamer sequel after lamest sequel. Familiar titles will be followed by so many numbers that filmgoers looking for a Friday-night flick will need a calculator just to figure out which of the threequels and fourquels they want to see — if any at all...
As for next summer’s sequel orgy, both Hannibal Rising (the fourth Hannibal Lecter pic, this one a prequel) and The Hills Have Eyes II will get the foreplay started, followed by Spider-Man 3, Shrek the Third, another Pirates of the Caribbean, Hostel: Part II, Fantastic Four 2, Evan Almighty (a follow-up to Jim Carrey’s Bruce Almighty, this time starring Steve Carell), Live Free or Die Hard (Bruce Willis as John McClane for the fourth time), Transformers (a live-action sequel to the animated original), Harry Potter and the Order of the Phoenix (fifth in the series), The Bourne Ultimatum (No. 3, which is actually No. 4 if you count that cheesy Richard Chamberlain version from 1988) and Rush Hour 3. Then, the sequel frenzy climaxes at the end of the year (get that Marlboro Ultra Light ready) with Resident Evil 3, Mr Bean’s Holiday (Bean II), The Golden Age (a.k.a. Elizabeth 2), Alien vs. Predator 2, National Treasure II and Halloween 2007 (too many to count). And those are just the ones I know about.”
 
- For Time person of the 06 year: YOU - 
Writes columnist Kevin Maney in USA Today, contesting Time ‘you’ cover story, under the headline 2006 may be the year of ’you,’ but 2007 may be the year to get over it: “The Time’s choice is getting mocked by bloggers — aka users. The magazine kind of shot itself in the foot. Managing Editor Rick Stengel wrote an explainer saying that he asked for public input about the Person of the Year. Suggestions flooded in for newsmakers such as Donald Rumsfeld, Al Gore and Sacha Baron Cohen. But apparently nobody suggested "you." So in the end, Time asked us for our input like a good New Media do-bee, then played its Old Media power card and decided on its own choice — proving that users aren’t really that in charge, and thus probably not deserving of Person of the Year status … Anyway, here at the end of the year, "user-generated" seems to be ascending to a whole new level … We’ve got companies such as General Motors hyperventilating over user-generated advertising. GM is asking users — citizens, amateurs, whatever — for ideas for an ad it will produce. Doritos is running a contest: Submit your self-produced Doritos ad, and the best one will be aired during the Super Bowl in a slot costing $2 million. Perhaps an ad depicting Spock and Kirk sharing a bag of chips ... A couple of weeks ago, Sun Microsystems Chairman Scott McNealy enthusiastically told me about one of his favorite new projects, called Curriki. It’s essentially using the Web to let people contribute to the creation of online textbooks for grades K-12. "I think it is potentially as powerful as the Google idea or the MySpace idea," McNealy says. New site Wize.com is a kind of user-generated Consumer Reports magazine. It scans the Web for millions of reviews posted by individuals on hundreds of sites, sorts and tallies them, and comes up with ratings. This is a twist known as the wisdom of crowds. This wisdom can tell us that if you want a waffle maker, you should get a Waring WMK300 Professional Belgian Waffle Maker. It costs about $80. Where will this trend go in the next year? ... Call the editors of Time. User-generated blah blah blah. That was so 2006.
 
- For blogging -
Research agency Garter says Blogging will see be at its peak in 2007. This was forecast by the research agency in its Top 10 predictions in 2007. Gartner predicts the number of active bloggers would level off in the first six months of 2007 at roughly 100 million worldwide. According to Daryl Plmmer, Gartner research fellow, “...the reason for this is that most bloggers who love their sites are committed to keeping it up, while others have got bored and moved on.” Recently Technorati said that nearly 100,000 new blogs were being created every day, and 1.3 million blog posts were written. It said the numbers of blogs are doubling once in seven months, which is less than its peak at the start of the Web 2.0. “A lot of people have been in and out of this thing,” said Plummer. “Everyone thinks they have something to say, until they’re put on stage and asked to say it.”
 
- For Indian economy -
Global Insight, an international economic and business research firm, predicts that in 2007 India will post a GDP growth of around 8 per cent even as the global growth rate will decline to 3.3 per cent from 3.9 per cent in 2006. It expects that the Federal Reserve will cut interest rates three times in 2007 to bring the Federal fund rates down to 4 per cent. This would be good news for the local capital markets as it could lead to more FII inflows. Global Insight also expects oil prices to remain firm and the downward pressure on the US dollar to continue as the US economy will grow by about 2.2 per cent. Says Global Insight’s chief economist Nariman Behravesh: “India’s growth has also amazed - averaging more than 9 per cent since January, though it should come in around 8 per cent next year. Unlike China, much of India’s growth is consumer-led. While India’s inflation rate is a little higher than China’s, there are very few signs of overheating in either economy.”

Finance and banking professor at the Indian Institute of Management, Ahmedabad, TT Ram Mohan says India’s GDP could be in excess of 8 per cent due to huge investments being made by the industry. “The Indian economy can absorb crude oil prices of up to $60 per barrel. The rupee will continue to appreciate against the US dollar in the long-term. Indian exporters have adapted well to the appreciating rupee by cutting down costs further… A slowdown in the US economy could lead to more outsourcing to India.” (Source: The Economic Tmes)
 
- For India -
According to Fidelity International, the long-term economic and equity market outlook for India remains favourable and while inflation needs to be monitored closely, economic growth is likely to remain on track at around 8 per cent in 2007. Observes Sandeep Kothari, Fund Manager, Fidelity Equity Fund and Fidelity Tax Advantage Fund, “Looking ahead, both the long-term economic and equity market outlook for India remains favourable. It is likely that economic growth will remain on track at around 8 per cent in 2007. Of note, the macro environment has been underpinned by investment and consumption growth, with overall investment supported by strong corporate investment and a rise in infrastructure spending, while a surge of young people in the population, higher incomes and rising retail credit are anticipated to drive consumption growth. The Reserve Bank of India took proactive measures during 2006 to prevent asset bubbles from occurring, as well as to keep inflation in check. Whilst we may see another 25-50 basis point increase in interest rates during the first half of 2007, higher rates are unlikely to derail growth and the overall trends are expected to remain intact. Additionally, although inflation has edged up slightly and needs to be monitored closely, it is not a cause for concern at current levels. From an earnings growth perspective, there have been 13 consecutive quarters of upwardly revised figures; the latest revisions saw FY07 earnings growth rise from 18.1 per cent to 30.0 per cent. With valuations at the higher-end of the trading range, there is potential risk for some near-term market volatility. However, it’s also worth noting that current valuations appear to be fairly well-supported by earnings growth and the positive macro environment.”
 
- For mobile and wireless technology - 
According to David Haskin in Comptuerworld article The seven top mobile and wireless trends for 2007, “The top mobile and wireless trends that will emerge in 2007 wouldn’t be possible without the two biggest stories of 2006: the advent of the cheap smart phone, and Sprint Nextel’s bodacious announcement that it is building a nationwide mobile WiMax network. So before looking ahead, let’s take a brief look behind ... Toward the end of 2006, a glut of competent smart phones costing $200 or less hit the market, which is two to three times less expensive than similar phones had been previously. These phones include the BlackBerry Pearl, Samsung’s BlackJack, Nokia’s E62 and the Treo 680. This trend will lead to far broader adoption not just of smart phones but also of many applications.”
 
- For telecom in India -
According to Minister for Communications and Information Technology Dayanidhi Maran, India will have 250 million telephone subscribers by 2007 from the current 185 million. India’s telecommunications industry is on a very high growth trajectory. We have already crossed the 185 million subscribers mark, and by 2007 India will have 250 million phone subscribers. Our mobile subscriber base is increasing phenomenally each year, adding almost six million new subscribers a month, which means one customer is added every second.”
 
- For Indian car enthusiasts - 
Audi AG will start making cars in India in the autumn of 2007 with the assembly of the Audi A6, using imported auto parts produced in Germany. The plant in Aurangabad, located in the manufacturing facility of SkodaAuto India, will assemble more than 300 cars in 2008. Audi says it will also open its own sales and distribution company in Mumbai in the first quarter of 2007 and will expand its network of dealers in India to at least eight from the current three in Mumbai, Bangalore and Delhi.
 
- For beverages -
According to a study by the London-based market intelligence firm Euromonitor, in the past one year, consumer preferences in India have shifted towards healthier drinks. “Carbonates began to decline, as consumers switched to fruit/vegetable juice and bottled water. The lingering effects of the discovery of pesticides in carbonates in 2003 took their toll while consumers began to look for healthier alternatives. Various soft drinks and other healthy alternatives are eroding sales of carbonates, including flavoured milk drinks, fruit/vegetable juice and bottled water. The improved distribution of bottled water and the wider availability of juices at entertainment centres attracted customers who were previously cola loyalists. Furthermore, coffee chains emerging across cities and in shopping malls are luring the youth to coffee with a fashionable and relaxed positioning.” The study predicts that the soft drinks market in India will see a robust growth in the next four to five years. “This will occur despite a total volume and constant value decline for carbonates.” Growth will be led by bottled water and, from a smaller base and with slower growth, fruit/vegetable juice. Health and convenience are predicted to be the two most important factors affecting buying behaviour, as carbonates and concentrates play second fiddle to healthier bottled water and fruit/vegetable juice,” it says. (Source: The Economic Times)

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yaaaaaaaaaa
 
 
| 13 January 2007
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Mr.Ratan Tata's new car project in Singur in West Bengal (Rs.1 lakh per car) could pose a big threat to motobike manufacturers like Bajaj & Hero Honda. The cost of the bikes produced Bajaj / Hero Honda and even TVS are in the range of Rs.50,000 and Rs.80,000. When a Tata Car can cost only Rs.1 lakh where five people can sit comfortably, most people will opt for this car rather than a bike purely going by "value for money" logic. I wish Tatas and others similarly placed, can also dream first before making it a reality the following (chiefly targetting the masses)1) Two/Three bedroom apartments in the price range of Rs.1 lakhs and Rs.2 lakh in major cities / towns.2) Bisleri drinking water costs Rs.60/- per bottle for 20 litres, currently. The cost could be brought down to Rs.5 or Rs.10 for 20 litre bottles with better quality drinking water.3) Premium brand shirts / trousers in double digit price range say around Rs.50 to Rs.99 each. Already, some brands have embarked on this exercise - good on them.4) PCs in three digit figure range (Rs.999). This could give a great penetration to internet users all round the country.5) Two wheelers should be in the price range of Rs.10,000-Rs.20,000. 6)Providing hassle free loan to all the underprivileged & for every child to undergo quality education in the best english medium schools. The loans could be recovered once such children mature and are gainfully employed - some mechanism need to be worked out. Simultaneously, plenty of good quality schools need to be constructed in areas where they seem to be missing and hiring of good quality teachers need to be done beforehand. Thrust should be HASSLE FREE LOAN FOR EVERY CHILD to be repayed only when they are gainfully employed after passing out + 2 and graduation.
 
 
| 03 January 2007
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After reading the above, one gets the impression our country is moving in the rt. direction but still a long way to go. The following are just to remind the policy makers not to slow down or become complacent with the present growth rate: (1) Mr.Soros (George!),a global financer & philanthropist, feels, India might have got over heated and therefore it needs to cool down. Mr.Chidambaran has rightly opposed this view. (2) Our country needs to be in double digit growth (10%) on a sustaining basis for many more years to come - this could be possible with only more and more and more FDI in as many sectors as possible(3) Our hon'ble President of India has said at any point of time, property related litigation is worth around 1,50,000 crores (one lakh fifty thousand crores) of rupees and therefore through FAST TRACK MODE all such disputes shoud be settled once for all (within the next two to three years) (4) Finance Ministry estimates around 100,000 crores (one hundred thousand crores) of rupees locked up as NPA (non performing assets) and this should be recovered through FAST TRACK MODE with the help new breed of accountants / auditors / loan recoverable agencies within the next two to three years(5) Stringent laws (criminal offence equivalent status) must be introduced to dissuade people from stealing power - this will greatly help in lots of money flowing into new power generation units in many parts of the country (roughly 38-40% of power supplied is stolen thrughot the country) (6) In developed countries, collecting fines is a way of good income for the Govt. which also aims at disciplining people at large - traffic violiation fines, power theft fines, and many such fines should be imposed and collected through a good transparent mechanism (7) Our Hon'ble President has suggested demating of Life Insurance Corporation's certificates - roughly 20% or more such certifiates are fake which could be controlled thro' dematting. On similar lines, hosing papers, could also be considered for demating. (8) Farmer's committing suicides still continue which need to be addressed at the right levels with speed (9) Many people in both rural & urban india, are prone to rude behaviour which could be the mother of many problems facing the society - sutable measures need to be taken to make them feel at ease & comfort - some mechanism to be found out for correcting such behaviour (10) In many families including joint families, some fathers openly abuses their children in front of their mother and other members; mothers also abuse children in front of others; cousins play pranks; unnecessary interference is done by one/many members in other's personal affairs causing irritation / lack of motivation and so on - a proper mechanism to be found out to counter such problems facing one in every three or four families in India (perhaps house to huse survey regularly can ease this situation)(11) Employment for all categories should be introduced both in urban India and rural India which could enable not only freshers/youngsters but also the aged can look forward to some good openings (12) It is good to see our car manufacturers have gone in for record numbers of production - once the infrastructure is in place - car manufacturers will find it difficult to cope with the demand.
 
 
| 22 December 2006
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