US dream a myth! The price Americans pay for growing inequality

America likes to think of itself as a land of opportunity and others view it in much the same light. But while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual's life chances depend on the income and education of his or her parents?

Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the US today than there is in Europe, or indeed, in any advanced industrial country for which there are data.

This is one of the reasons that the US has the highest level of inequality of any of the advanced countries, and its gap with the rest has been widening. In the 'recovery' of 2009-10, the top 1% of US income-earners captured 93% of the income growth. Other inequality indicators are as bad or even worse. The trend is one of concentration of income at the top, the hollowing out of the middle and increasing poverty at the bottom.

It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: bankers who had led the global economy to the brink of ruin received outsize bonuses.

A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence: either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).

So, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top are enriched at the expense of those at the bottom.

It might not be so bad if there were even a grain of truth to trickle-down economics, the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off, with lower real incomes, than they were in 1997, a decade and a half ago. All of the benefits of growth have gone to the top.

Defenders of US' inequality argue that the poor and those in the middle shouldn't complain. While they may be getting a smaller share of the pie than they did in the past, the pie is growing so much, thanks to the contributions of the rich and super-rich, that the size of their slice is actually larger. The evidence contradicts this. Indeed, the US grew far faster in the decades after World War II, when it was growing together, than it has since 1980, when it began growing apart.

Rent-seeking distorts the economy. Market forces, of course, play a role, too, but markets are shaped by politics; and, in the US, with its quasi-corrupt system of campaign finance and its revolving doors between government and industry, politics is shaped by money.

For example, a bankruptcy law that privileges derivatives over all else, but does not allow the discharge of student debt, no matter how inadequate the education provided, enriches bankers and impoverishes many at the bottom. Where money trumps democracy, such legislation has become predictably frequent.

But growing inequality is not inevitable. There are market economies that are doing better, both in terms of GDP growth and rising living standards. Some are even reducing inequalities.

America is paying a high price for continuing in the opposite direction. Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset, its people is not being fully used. Many at the bottom, or even in the middle, are not living up to their potential, because the rich, needing few public services and worried that a strong government might redistribute income, use their political influence to cut taxes and curtail government spending.

This leads to underinvestment in infrastructure, education and technology, impeding the engines of growth. The Great Recession has exacerbated inequality, with cutbacks in basic social expenditures and with high unemployment putting downward pressure on wages. Moreover, inequality leads to economic instability.

But, most importantly, US' inequality is undermining its values and identity. With inequality reaching such extremes, it is not surprising that its effects are manifest in every public decision. America has become a country not 'with justice for all', but rather with favouritism for the rich and justice for those who can afford it.

(The author is professor of economics at Columbia University)

curtsy-Ganashakti

Current Affair--Rio summit ends with warning on corporate power

The UN sustainable development summit in Brazil has ended with world leaders adopting a political declaration hammered out a few days previously.

Environment and development charities say the Rio+20 agreement is too weak to tackle social and environmental crises.
Gro Harlem Brundtland, author of a major UN sustainable development report 25 years ago, said corporate power was one reason for lack of progress.
Nations will spend three years drawing up sustainable development goals.
They will also work towards better protection for marine life on the high seas.
But moves to eliminate subsidies on fossil fuels - recommended in a number of authoritative reports as likely to boost economies and curb CO2 emissions - came to naught.
Plans to enshrine the right of poor people to have clean water, adequate food and modern forms of energy also foundered or were seriously weakened during the six days of preparatory talks.
And many governments were bitter that text enshrining women's reproductive rights was removed from the declaration over opposition from the Vatican backed by Russia and nations from the Middle East and Latin America.
'No leadership' The UN had billed the summit as a "once in a generation chance" to turn the global economy onto a sustainable track.
"It absolutely did not do that," said Barbara Stocking, chief executive of Oxfam GB.

The rights of poor people to have access to clean water were not enshrined as hoped

"We had the leaders of the world here, but they really did not take decisions that will take us forward," she told the BBC.
"It was a real lack of action that is very worrying, because we know how difficult the situation is in much of the world in terms of environment and poverty, and they did not show the leadership we needed them to bring."
The president of the most impoverished country in the western hemisphere, Haiti's President Michel Martelly, said the summit could have delivered more.
"I feel like these poor countries, these countries that are always being hit by catastrophe - things have not changed much," he told the BBC.
"So on this summit I will say that much more effort needs to be done so we can correctly and precisely come out with resolutions that will have an impact on the lives of people being affected."
Cash concern Developing countries had argued that they needed financial assistance in order to meet the costs of switching onto a green development path.
But with the US in an election year and the EU deep in eurozone mire, any mention of specific sums was blocked.
As a consequence, developing countries refused to let the declaration endorse green economics as the definitive sustainable development path.
Prof Jeffrey Sachs, the Columbia University economist and special adviser to UN Secretary-General Ban Ki-moon, said support was needed.
"Those of us who look at this day in, day out know that many poor countries need that kind of help," he said.

Developing countries had said they needed financial help to adopt greener forms of development

"And it does not do any good to cite large ambitious promises many years out, and then behind the scenes to say 'we're not going to talk about how they're going to be fulfilled."
But Lisa Jackson, Administrator of the US Environmental Protection Agency (EPA) and deputy head of the US delegation here, said the US was fully behind the "green economy" - and that the summit could help deliver the vision.
"The negotiated document, which is really the first time we have a multilateral document that talks about the green economy that has broad-based support - that is a big push," she said.
"But probably more important are the connections that are being made between businesses large and small, civil society, academia and of course governments at the national and sub-national level - all those things are pushing the green economy forwards."
Norwegian would

“Start Quote

People who have economic power influence political decision-makers - that's a fact”

Gro Harlem Brundtland Fromer head of World Commission on Environment

The need to put the world on a sustainable track, and the perils of not doing so, were outlined most influentially in a 1987 commission chaired by Gro Harlem Brundtland, then Prime Minister of Norway.

Speaking to BBC News in Rio, she reflected on the lack of real progress since then.
"Obviously when you look back 25 years now, less than one would have expected has happened - that's clear - but you can't think you can turn the world round in 25 years," she said.
She said there were "complex reasons" why governments had been unable to take the vision further - including the power of corporations.
"I think [the allegation] is justified - it's not the whole truth but it certainly is a big part of it," she said.
"In our political system, corporations, businesses and people who have economic power influence political decision-makers - that's a fact, and so it's part of the analysis."
The next key date on the sustainable development journey is 2015.
The sustainable development goals should be decided and declared by then; also, the UN climate convention will have what some, with trepidation, are calling its "next Copenhagen" - the summit that should in theory usher in a new global agreement with some legal force to tackle global warming.
BBC

Paraguay President Fernando Lugo impeached by congress---This is a Coup.

Paraguay's Senate has voted to impeach left-wing President Fernando Lugo, forcing him to step down.

Both houses of Congress had voted on Thursday to begin impeachment proceedings over his handling of clashes between farmers and police last week in which at least 17 people died.
Mr Lugo likened the move to a coup by the right wing-controlled parliament, but said he would accept the decision.
Vice-President Federico Franco has already been sworn in as president.
He will serve the remainder of Mr Lugo's five-year term, which ends in August 2013.
After previously trying to get the Supreme Court to stop the impeachment vote, the fallen president said he accepted "what the law has stated, even though the law was twisted".
'No coup' Calling on his supporters to remain calm, he added that "the history of Paraguay and its democracy have been deeply wounded".
Mr Lugo's 2008 election ended 61 years of rule by the right-wing Colorado party.
The two main political parties, Colorado and Liberal, had put aside their differences and voted in favour of the motion to begin the impeachment trial.
The Liberals are part of Mr Lugo's ruling coalition.
In an appeal filed with Paraguay's Supreme Court on Friday, Mr Lugo's lawyers had said the proceedings do not ensure due process and that the president should have been granted more time to prepare.
A centre-right legislator, Carlos Maria, denied allegations of unconstitutionality. "There's nothing illegal here, there's no constitutional rupture, no coup," he told AP.
The impeachment sparked clashes between police on horseback and supporters of Mr Lugo massed outside the National Congress building in the capital Asuncion.
"We do not want the return of dictatorship," one protester who had travelled to the capital from the Brazilian border told the AFP news agency.
Water cannon was used by police to drive the protesters back.
'Poor performance'

The impeachment sparked clashes between police on horeseback and supporters of Mr Lugo

The impeachment motion accused Mr Lugo of a "poor performance" during the forced land eviction last Friday, in which seven police officers and at least nine farmers were killed.
Speaking on national television on Thursday, Mr Lugo said he would not resign, but "face the consequences" of the trial. He accused his opponents of carrying out an "express coup d'etat".
The Union of South American Nations has send an urgent mission of foreign ministers to Paraguay to "ensure the right to defend democracy".
Ecuador's President Rafael Correa warned that the regional bloc could invoke its "democracy clause" to sever ties with Paraguay and even close its borders if Mr Lugo is not tried according to "due process".
BBC regional analyst Leonardo Rocha says South American countries are worried that Mr Lugo, Paraguay's first left-wing president, is the victim of a political trial by the Colorado party and other right-wing groups.
Several South American countries, including neighbouring Argentina and Bolivia, have already said they do not recognise the new government, reports say.

Vice-President Federico Franco was sworn in as president shortly after Mr Lugo's impeachment

Land clashes During the clashes in eastern Canindeyu province that prompted the impeachment move, more than 300 police officers tried to evict 150 landless farmers from an estate owned by a wealthy businessman who is also a political opponent of Mr Lugo.
The eviction escalated into violence and the farmers opened fire on the police.
The farmers have argued the land was illegally taken during the 1954-1989 military rule of Gen Alfredo Stroessner and distributed among his allies.
Land disputes are not unusual in Paraguay, where a small fraction of the population owns about 80% of the land.
Mr Lugo - a former Catholic bishop who abandoned priesthood to enter politics - campaigned for the needs of the poor.
Before being elected in 2008, he promised land for some 87,000 landless families.
On Wednesday, in an attempt to calm tensions over the incident, Mr Lugo said he would open an investigation into what happened.
Based on BBC news

Syria says it shot down Turkish air force jet

Syria said on Friday it shot down a Turkish military plane that entered Syrian air space, and Turkey vowed to “determinedly take necessary steps” in response.

It was the most clear and dramatic escalation in tensions between the two countries, which used to be allies before the Syrian revolt began in March 2011. Turkey has become one of the strongest critics of the Syrian regime’s brutal response to the country’s uprising.

Late Friday, Syria’s state-run news agency, SANA, said the military spotted an “unidentified aerial target” that was flying at a low altitude and at a high speed.

“The Syrian anti-air defences counteracted with anti-aircraft artillery, hitting it directly,” SANA said. “The target turned out to be a Turkish military plane that entered Syrian airspace and was dealt with according to laws observed in such cases.”

Turkey issued a statement on Friday night following a two-hour security meeting led by Turkish Prime Minister Recep Tayyip Erdogan, saying Syrian forces downed the plane and that the two Turkish pilots remain missing.

It said Turkey “will determinedly take necessary steps” in response, without saying what those actions would be.

“Following the evaluation of data provided by our related institutions and the findings of the joint search and rescue efforts with Syria, it is understood that our plane was downed by Syria,” the statement said, without providing other details.

Relations between Turkey and Syria were already tense before the downing of the F4 plane on Friday.

Turkey has joined nations such as the U.S. in saying that Syrian President Bashar Assad should step down because of the regime’s brutal suppression of the uprising in his country. Turkey also has set up refugee camps on its border for more than 32,000 Syrians who have fled the fighting.

Syria and Turkey have expelled each other’s ambassadors and Syria has accused Turkey of supporting Syrian opposition and even allowing Syrian rebels to operate out of Turkish soil. Turkey strongly denies the allegations.

After a cross-border shooting by Syrian forces in April, Turkey said it would not tolerate any action that it deemed violating its security. The firing had left two refugees dead at a camp near the town of Kilis just inside Turkey.

Foreign Ministry Spokesman Selcuk Unal earlier on Friday rejected allegations that Turkey was sending arms and other equipment to Syrian rebels as baseless. Mr. Unal said Turkey was not sending weapons to any of its neighbours, including Syria.

Turkey’s military provided no details on the downed plane’s mission on Friday, but some Turkish TV reports said it was on a reconnaissance flight.

Syria claimed the jet violated its air space over territorial waters, penetrating about a kilometre, but that Syrian vessels joined the search for it, according to Turkey’s NTV television. It said Syria forces realised that it was a Turkish jet after firing at it.

Ilter Turan, a professor of political science at Istanbul’s Bilgi University, told NTV that Syria’s action was clearly “hostile,” even if it violated its air space.

“They could have either sent their planes to confront it or force it to land, it is a hostile act by any standard,” Mr. Turan said.

Mr. Turan, however, predicted that Syria will try to avoid escalating tensions further.

Mr. Erdogan said the plane went down in the Mediterranean Sea about 13 km away from the Syrian town of Latakia. Four Turkish gunboats and three helicopters were searching for the pilots and wreckage of the plane.

The Turkish military said the plane disappeared from its radar and that radio contact was lost at 11.58 a.m. (1.28 p.m. IST) on Friday during a mission flight.

Some eyewitnesses in Turkey’s seaside area of Hatay province told NTV television that the plane was flying so low they thought it would “hit the roofs.” They said the plane then flew toward the sea.

U.S. Secretary of State Hillary Rodham Clinton earlier this month had warned about a massing of Syrian forces near Aleppo, saying such a deployment could be a “red line” for Syria’s northern neighbour Turkey “in terms of their strategic and national interests.” 

AP

Moody's downgrades 15 major banks all over World

The credit ratings agency Moody's has downgraded 15 banks and financial institutions.

UK banks downgraded include Royal Bank of Scotland, Barclays and HSBC.
In the US, Bank of America, Citigroup, Goldman Sachs and JP Morgan are among those marked down.
BBC business editor Robert Peston reported on Tuesday that the downgrades were coming and said that banks were concerned as it may make it harder for them to borrow money commercially.
"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities," Moody's global banking managing director Greg Bauer said in the agency's statement.
The other institutions that have been downgraded are Credit Suisse, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank, Royal Bank of Canada and Morgan Stanley.
'Disagrees' Moody's said it recognised, "the clear intent of governments around the world to reduce support for creditors", but added that they had not yet put the frameworks in place that would allow them to let banks fail.
Some of the banks were put on negative outlook, which is a warning that they could be downgraded again later, on the basis that governments may eventually manage to withdraw their support.

“Start Quote

The most interesting thing about the Moody's analysis is that it, in effect, creates three new categories of global banks, the banking equivalent of the Premier League, the Championship and League One”

Robert Peston Business editor

In a statement, RBS responded to its downgrade saying: "The group disagrees with Moody's ratings change which the group feels is backward-looking and does not give adequate credit for the substantial improvements the group has made to its balance sheet, funding and risk profile."

The BBC's Scotland business editor Douglas Fraser tweeted: "Cost of RBS downgrade by Moody's: having to post an estimated extra £9bn in collateral for its debts."
Of the banks downgraded, four were cut by one notch on Moody's ranking scale, 10 by two notches and one, Credit Suisse, by three notches.
"The biggest surprise is the three-notch downgrade of Credit Suisse, which no one was looking for," said Mark Grant, managing director of Southwest Securities.
BBC

Why fears of a foreign hand are real

There are enough reasons to suspect that companies overseas influence Indian politics

Pranab Mukherjee is likely to be India’s next President. It seemed to be touch and go until the tide turned in his favour. It has been suggested that the corporates swung it for him not because he is one of the most seasoned Indian politicians but because they wanted him out of the Ministry of Finance. He has acted tough on retrospective taxation and GAAR – the measures in his recent budget to tackle black income generation. But it would not be surprising if the real pressure was from foreign shores. Indian corporates are sensitive to what their foreign counterparts think. So is our political leadership. Britain and Netherlands exerted strong influence on the Vodaphone case. How much of our politics is being determined by such pressures?

Pressure on polity

Several recent events testify that pressure is certainly being exerted on the polity: Hillary Clinton’s visit to India to influence the government’s policies on trade with Iran and on FDI in retail, the S&P downgrade of India, the Aircel Maxis deal. There are also less visible cases of foreign pressure as in defence purchases (the British were upset at our rejection of the Eurofighter), energy sector investments (oil, gas and nuclear), opening of markets and so on.

The Bofors scam has had a continuing impact on politics since 1987. Sten Lindstrom, the former head of the Swedish police who led the investigations into the Bofors-India howitzer deal, recently underlined that there was conclusive evidence that Ottavio Quattarocchi, a close friend of the Nehru-Gandhi family, was one of the recipients of kickbacks. His role in swinging the Bofors deal at the last minute was known. It is not in doubt that payoffs were made or that the Bofors guns are good. The only unsettled issue is who got the money.

That Mr. Quattrochi had powerful friends was confirmed when he was allowed to escape the country during the Congress rule. The case was apparently deliberately spoilt by the investigative agencies, including the CBI and, therefore, lost in the courts — in Malaysia, Britain and Argentina. The red corner notice against him “could not be executed” since our police agencies could not “find” him even though journalists could interview him.

Evidence points to a high level cover up. M.S. Solanki, then the External Affairs Minister, sacrificed his Cabinet berth rather than reveal what he wrote in the paper he passed on to the Swiss counterpart at a meeting. At that point of time, the Swiss bank accounts were being investigated by the Indian agencies to trace the Bofors payoff trail. Could such a sacrifice of a political career be for an ordinary leader?

Who took the money even if not Rajiv Gandhi and why did the investigative agencies spoil the case? Investigations are essential to clear the air about these questions. A former Minister in the Prime Minister’s Office mentioned to this author in an interview on the black economy that when he went with the Bofors file to the then Prime Minister, he was told to close the file as it could cause a threat to his life. No wonder, none of the non-Congress Prime Ministers changed the course of investigations to bring them on track and none of the Congress Prime Ministers has wanted the truth to come out.

Kickbacks are common globally. Sweden is one of the least corrupt countries in the world but its corporations have bribed to get contracts as the Bofors case shows. U.S.-based multinational corporations have resorted to bribes in spite of their being illegal under that country’s law. Recently, Walmart admitted to having bribed its way through in Mexico. When the top management learnt of it, rather than exposing corruption, the internal probe was closed. The same Walmart has been trying to enter India. Ms Clinton’s agenda included “persuading” India to open its doors to foreign retail. The only Chief Minister she visited was Mamata Banerjee, the important UPA partner opposing FDI in retail. It is reminiscent of Henry Kissinger and the Secretaries of Energy and Defence flying to India to lobby for Enron in the mid-1990s. Enron admitted to spending $60 million in India, to “educate” policymakers.

It is not just a few MNCs that indulge in corruption or use their governments to apply pressure on policies. MNC banks are known to help Indians take their capital out of India. UBS bank, the largest Swiss bank, was fined $750 million by the U.S. for helping its citizens to keep secret bank accounts. The same UBS bank was allowed entry into India in spite of its known role; was it a reward for helping some powerful people?

Executives of Siemens, a supposedly honest MNC and an important player in India, were indicted in the U.S. in December 2011 for bribery in Argentina. Investigations revealed that the company also made illegal payments to the tune of $1.4 billion from 2001 to 2007 in Bangladesh, China, Russia, Venezuela and other countries. These were often routed via consultants. The company paid fines and fees of $1.6 billion to the U.S. and German governments for the bribes it paid across the globe.

Siemens started bribing soon after the end of World War II to get contracts under the Marshall Plan which were mostly going to the Americans. Since its prosecution, Siemens claims to have appointed Compliance Officers to check bribery. But, with the prevalence of a high degree of illegality internationally, can one company be honest while others are not? How would it win contracts when those in charge expect to be bribed? Since non-transparent processes are set up, at every step, decisions need to be influenced, as seen in the Bofors case or the 2G spectrum allocation.

The Vodaphone case is significant. MNCs (Indian and foreign) have used tax havens and tax planning to avoid paying taxes in India. They create a web of holdings to hide the identity of the real owners of a company or who it is being transferred to. In 1985, in the Mcdowell case, the Supreme Court bench observed, “Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by resorting to dubious methods”. This judgment was overturned in 2003 in Union of India vs Azadi Bachao Andolan on the use of the Mauritius route to avoid paying tax in India. Vodaphone took advantage of this judgment to successfully argue against having to pay capital gains tax in India on transfer of a company in a tax haven which owned the Indian assets. Mr. Mukherjee was trying to recover lost ground.

Dominant interests

Indian policies have been subject to foreign pressures since the days of the Cold War in the 1950s. But until the mid-1980s, the decisions were accepted as being in the “long-term national interest.” There were accusations in the procurement of the Jaguar aircraft also but these did not create the furore that the Bofors scam did. Since the late 1980s, as in the case of Bofors or the new economic policies in 1991 or the Indo-U.S. nuclear deal, sectional or individual interests have become dominant. These have played havoc with national politics. Pressures and counter pressures are mounted through political parties and their leaders and big business.

The lesson is that foreign pressures tend to damage processes that national politics cannot undo. The public is left bewildered by the goings on, as in the present case of selection of the presidential candidate.

(The writer is Chairperson, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University. Email: arunkumar1000@hotmail.com)

curtsy-The Hindu 

Trinamool has set in motion agrarian counter-reform, says N. Ram

New dispensation accused of attempts to undo achievements of Left Front

The Trinamool Congress-led government in West Bengal appears to have set in motion an “agrarian counter-reform,” N.Ram, former Editor-in-Chief of The Hindu, said here on Wednesday pointing out that there have already been attempts to undo the achievements of the Left Front.

Speaking at a seminar to commemorate the 35th anniversary of the setting up of the first Left Front government in the State, Mr. Ram said that before the Left Front came to power, “West Bengal presented the picture of a State in prolonged decline.”

He said that in the early days of the Trinamool Congress-led government there have been reports of 61 farmer suicides — “a symptom of the agrarian counter-attack.” He pointed out that since its arrival in 1977, the Left Front government had managed a turnaround in the prevailing situation of a long period of great distress.

“An example of what agrarian counter-reforms mean for the people of this State is that much of the development of the State can be compromised,” he said.

Loss of lives

Speaking on a range of issues including attacks on the freedom of expression, efforts by anti-Left forces “to tap into Communalism” in recent years and attempts to “bureaucratise the panchayats,” Mr. Ram also drew attention to the large number of people who were killed or wounded in attacks.

“We are concerned about the loss of lives. We want political parties to function freely; the way they functioned earlier — the way Mamata Banerjee was allowed to function in the State, campaign militantly — we want the same rights to be enjoyed by all political parties in the State,” he said.

Mr. Ram also cautioned that there have been “early signals of intolerance towards those who are critical of the government and the Chief Minister in the State” — a dangerous trend that must be “arrested at the start.”

The seminar was also addressed by eminent economist C. P. Chandrasekhar and the State’s former Finance Minister, Ashok Mitra, who was among the five Ministers who took the oath of office on June 21, 1977 when the first Left Front government was formed in the State. The session was moderated by Marxist scholar Shovanlal Duttagupta.

“The fact that there was a fundamental transformation in the nature of India’s political economy with the coming of the Left Front in 1977 cannot be denied. It placed on the agenda — the last three years notwithstanding — an alternative way to take this country forward in the direction where we will finally be able to mobilise the support for its structural transformation,” Mr. Chandrasekhar said
The Hindu

Syrian people must decide their leadership: Putin

President Barack Obama said Tuesday that China and Russia are “not aligned” with the US and other nations on Syria but says both countries’ leaders recognize the dangers of a civil war.

Obama’s comments at the end of the Group of 20 meeting of the world’s largest economies came after Russian President Vladimir Putin said only the Syrian people have the right to decide whether their leader, Bashar Assad, steps down.

Putin told a separate news conference that only some Syrians “who are represented by the armed position” want Assad to step down.

“It’s my personal belief, and I shared this with them, I don’t see a scenario in which Assad stays and violence is reduced,” Obama countered.

While Obama said Russia and China recognize the dangers of all out civil war in Syria, “I wouldn’t suggest that at this point the United States and the rest of the international community are aligned with Russia and China in their positions.”

Obama met with Putin and Chinese President Hu Jintao on the sidelines of an economic summit. Syria was a top subject.

China and Russia have close ties to Syria and have vetoed two UN resolutions that mentioned the threat of sanctions against President Assad’s regime. China and Russia, however, did support an observer mission in Syria and a plan by special envoy Kofi Annan to end the violence.

Putin and Obama agreed in bilateral talks Monday that Syrians should choose their own next government, indicating a subtle shift for both.

“It’s important to arrive at such a situation” through negotiations among groups in Syria, Putin said Tuesday. “The security and interests of all parties should be agreed upon, not like some countries in North Africa, where violence still continues, despite a regime change.”

Since the start of the anti-Assad uprising in March 2011, the regime has responded to unrest with brute force, dispatching snipers, troops and tanks to quash dissent. Activists say more than 14,000 people have been killed since, many of them civilians.

In general, the violence has not stopped the uprising, emboldening protesters, galvanizing international condemnation and leading many in the opposition to take up arms.

Putin said Russia and the U.S. still differ on many issues after talks during the G-20.

“It will not be settled, the missile-defense problem, irrespective of whether Obama is going to be reelected or not,” he said. “To drastically change it, it would take the U.S. to agree with our proposal,” to share control of the system.

Associated Press Writer Ben Feller contributed to this report from Los Cabos, Mexico. 

AP

Ousted Egyptian leader Hosni Mubarak 'close to death'

Reports from Cairo say former Egyptian President Hosni Mubarak is critically ill and may be close to death.

The 84-year-old is said to have had a stroke, and was moved from prison to life support in an army hospital.
Supporters and opponents gathered outside the hospital through the night, after initial reports said he was "clinically dead".
Mubarak was removed in last year's uprising, and jailed for life for his role in the death of protesters.
There have been frequent reports since then that his health has deteriorated, many of which have proved wrong.
The news comes as tens of thousands of people protest in Cairo's Tahrir Square against a move by the ruling military council to assume new powers.
The rally was called by the Muslim Brotherhood, which is also claiming victory for its candidate Mohammed Mursi in last weekend's presidential elections.
His rival Ahmed Shafiq, a former prime minister under Mubarak, has also said he has won.
Results are expected to be announced on Thursday.

Hosni Mubarak was jailed for life earlier this month

The Muslim Brotherhood has also vowed to retry Mubarak once in power, and insists that he should face the death penalty.
As Egyptians voted, the generals dissolved parliament and claimed all legislative power for themselves.
Activists have described the moves as a "military coup".
Scepticism On Tuesday, Mubarak - who ruled Egypt for 30 years - was transferred by helicopter to intensive care at the Maadi armed forces hospital after suffering a stroke, state media said.

Analysis

Yolande Knell BBC News, Cairo

There is now heavy security outside the Maadi Hospital and little more official news emerging about the fate of Hosni Mubarak who has been moved there and is in intensive care.
Since the 84-year-old was taken to Tora Prison Hospital after his conviction at the start of this month, there has been an increase in alerts about his health.
The official Mena news agency said that during Mubarak's latest crisis, which appears to be the most serious yet, his heart stopped beating until he was revived by defibrillation and he suffered a "brain stroke". It then quoted medical sources saying he was "clinically dead" after he was moved to the military hospital.
What has caused some confusion is that security sources told journalists they disputed the term.
While it is too early for obituaries, state TV Channel One has been airing archival footage and pictures of Mubarak as a young military pilot, war hero and during his early days in office when he was popular.
There is no doubt that this is how he would ultimately like to be remembered.

Correspondents say the hospital is better equipped to deal with such conditions than the prison hospital where he was being treated.

The former leader is now said to be unconscious and on life support.
Doctors are said to have used a defibrillator on him several times. The device delivers an electric shock to the heart to try to re-establish a normal heartbeat.
There are lots of police officers currently deployed outside the hospital, the BBC's Kevin Connolly reports.
There are also small groups of people - both Mubarak's supporters and protesters against him - who have gathered outside the building, our correspondent says.
One woman, a supporter, was almost shaking with emotion and saying "I love him".
Another supporter, a man, stood holding a poster of Mubarak. "He is my father. I love him more than my father. The Muslim Brotherhood are criminals. They have destroyed our country. Mubarak kept us in peace for 30 years," he said.
A group of anti-Mubarak young men responded by shouting: "We are poor, and he did nothing for us. His family ate meat and we were starving."
"I'm ready to hammer his grave with my shoe," another protester added.
Egyptians will be very sceptical about any reports about the former president's health, the BBC's Jon Leyne in Cairo says.
Before Mubarak's trial began, his lawyer said he was in a coma, only for the former president to appear - alive and conscious, if not particularly well - in court, our correspondent says.
Now there will be fears that the state of Mubarak's health could be used as a distraction, as Egypt waits for the result of the hotly disputed presidential election.
However, our correspondent adds, the latest reports are better sourced than any before.
BBC

Wikileaks' Julian Assange seeks asylum in Ecuador embassy

Wikileaks founder Julian Assange is seeking political asylum at Ecuador's London embassy, the country's foreign minister has said.

"Ecuador is studying and analysing the request," Foreign Minister Ricardo Patino told reporters in Quito.
Last week the UK's Supreme Court dismissed Mr Assange's bid to reopen an appeal against extradition to Sweden over alleged sex crimes he denies.
The Foreign Office says it will work with Ecuador to resolve the situation.
Mr Assange could still take his case against extradition to the ECHR and has until 28 June to make the move, or extradition proceedings will begin.
Swedish prosecutors want to question him over allegations of rape and sexual assault made by two female former Wikileaks volunteers in mid-2010 but have not filed any charges.
Mr Assange, whose Wikileaks website has published a mass of leaked diplomatic cables that embarrassed several governments and international businesses, claims the sex was consensual.
'Minimum guarantees'In a statement, Ecuador's embassy said he had arrived there on Tuesday afternoon to seek asylum.
"As a signatory to the United Nations Universal Declaration for Human Rights, with an obligation to review all applications for asylum, we have immediately passed his application on to the relevant department in Quito," it said.
"While the department assesses Mr Assange's application, Mr Assange will remain at the embassy, under the protection of the Ecuadorean government."
It said the decision to consider the bid for asylum "should in no way be interpreted as the government of Ecuador interfering in the judicial processes of either the United Kingdom or Sweden."

Ecuador's Foreign Minister Ricardo Patino said Mr Assange had claimed he was being persecuted

Mr Assange issued a statement, saying he was "grateful to the Ecuadorean ambassador and the government of Ecuador for considering my application".
Associated Press quoted Mr Patino as telling reporters Mr Assange had written to Ecuadorean President Rafael Correa saying he was being persecuted.
Mr Patino said the Australian had claimed "the authorities in his country" would not "defend his minimum guarantees in front of any government".
Mr Assange said he would not be protected from being extradited to "a foreign country that applies the death penalty for the crime of espionage and sedition," Mr Patino said.
The Foreign Office said the UK had now been officially informed by the authorities in Ecuador that Julian Assange was seeking asylum.
Since he was now in the embassy of Ecuador, he was "on diplomatic territory and beyond the reach of the police," a spokesman said.
The anti-secrecy campaigner fears extradition to Sweden may lead to him being sent to the US to face separate charges relating to Wikileaks, for which he could face the death penalty.
Swedish assurance But Swedish authorities have said the European Court of Human Rights (ECHR) would intervene if Mr Assange was to face the prospect of "inhuman or degrading treatment or an unfair trial" in the US.
Mr Assange was on £200,000 bail which was provided by several high-profile supporters including socialite Jemima Khan and Ken Loach, who each offered £20,000 as surety.
Ms Khan said on Twitter that she had expected him to face the allegations, adding, "I am as surprised as anyone by this".
Vaughan Smith, a friend who allowed Mr Assange to stay at his Norfolk home until December 2011, told the BBC he was surprised by the move but understood why he may have decided to seek asylum.
"There's been an organised campaign to undermine him," Mr Smith said. "And he believed that if he was sent to Sweden he would be sent to America."
Wikileaks has posted an alert on its Twitter feed: "ALERT: Julian Assange has requested political asylum and is under the protection of the Ecuadorian embassy in London."
It said Ecuador had offered asylum as early as November 2010.
Ecuador's deputy foreign minister said in 2010 his country was offering Mr Assange residency because it wanted to give him the opportunity to freely present the information he had.
However, President Rafael Correa subsequently dismissed the idea, which he said neither he nor Mr Patino had approved.
BBC

घर में नही दाने,अम्मा चली भुनाने।

 India announces $10 billion for debt-ridden eurozone

India on Tuesday announced a $10 billion contribution to the IMF’s additional $430 billion financial firewall to help the debt-wracked 17-nation eurozone so that the faltering world economy is protected against the spread of any financial contagion.

The announcement was made by Prime Minister Manmohan Singh in his address at the Plenary Session of the seventh summit of the Group of developed and developing countries (G-20) in the Mexican resort town of Los Cabos against the backdrop of growing calls to nations to increase contributions to the International Monetary Fund (IMF) for the bailout fund.

India’s contribution along with pledges by other member countries of the five-nation BRICS bloc has helped increase IMF’s resources and give a boost to the $430 billion fund being used as a firewall to support struggling eurozone economies.

“The International Monetary Fund has a critical supportive role to play in stabilising the eurozone. All members must help the Fund to play this role, I am happy to announce that India has decided to contribute $10 billion to the IMF’s additional firewall of $430 billion,” he told the world leaders at the seventh summit of the grouping which accounts for 80 per cent the world’s GDP.

India has previously pledged to make contributions to the bailout fund but did not disclose the exact amount of its contribution to the fund.

According to Chinese Vice Finance Minister Zhu Guangyo, the BRICS is committed to pledge $60 billion to boost the firewall. Besides India and China, the other countries in the bloc are Brazil, Russia and South Africa.

The IMF fund will serve to help governments that are struggling to cope with debt repayments but eurozone leaders still faced pressure from their G-20 peers to make reforms to head off future financial crisis.

Calls were being made to the eurozone to put in place a bigger financial firewall to combat the crisis before other countries will pour more cash into the IMF

Noting that developed countries have expanded the resources of the IMF enormously, largely to support programmes in rich countries, Dr. Singh said that steps are now needed to be taken to substantially expand the resource base of Multilateral Development banks so that they have the firepower to help developing countries pursue their development goals.

based on PTI news

Yemen southern army commander Qatan 'dies in suicide attack'

The Yemeni army commander leading the fight against militants in the south of the country has been killed in a suicide attack, officials say.

General Salem Ali Qatan was killed near his home in the port city of Aden, a medical official told AFP news agency.
Yemen is battling militants linked to al-Qaeda who have taken control of parts of the south of the country.
It has recently recaptured several strongholds in the restive southern province of Abyan.
Gen Qatan, Yemen's southern army commander, was killed while on his way to work by a man wearing an explosives belt, witnesses said.
One report said the attacker handed Gen Qatan a paper, shook his hand and then detonated his explosives.
At least four other people were wounded in the attack, AFP reported.
An al-Qaeda-linked insurgency and separatist unrest have blighted the south of Yemen for years.
Last year, empowered by uprisings against former President Ali Abdullah Saleh, Islamists consolidated their control over Abyan.
However, the Yemeni army recently launched an offensive that recaptured the towns of Shuqra, Zinjibar and Jaar.
BBC

Greece poll: Pro-bailout party's narrow win hailed

World leaders have welcomed the narrow election victory of Greece's broadly pro-bailout New Democracy party and urged Athens to form a cabinet quickly.

The eurozone group said reforms were Greece's "best guarantee" to overcome tough economic and social challenges.
The US stressed that it was in everyone's interests "for Greece to remain in the euro area".
The Syriza party, which rejected the bailout terms and came a close second, said it would lead the opposition.
With 99.9% of ballots counted, interior ministry results put New Democracy on 29.7% of the vote (129 seats), Syriza on 26.9% (71) and the socialist Pasok on 12.3% (33). There are 300 seats in parliament.
Greek voters had gone to the polls on Sunday following inconclusive elections in May.
New Democracy leader Antonis Samaras said Greeks had chosen to stay in the euro and called for a "national salvation government".

Analysis

Chris Morris BBC News Europe correspondent

New Democracy leader Antonis Samaras had portrayed this election as a choice between staying in the euro or going back to the drachma.
But that's not how Syriza and its supporters saw it - they believed it was about promoting a different kind of economic policy to help Greece out of a spiral of recession and unemployment.
The winner gets an extra 50 seats in parliament and that could be the decisive difference.
But it will still need to put together a coalition government which is strong enough to last - and that may not be so easy.

Syriza's leader Alexis Tsipras said his party would not take part in the government, and would instead become a powerful anti-austerity voice in the opposition.

The BBC's Mark Lowen, in Athens, says Mr Samaras is expected to try for a broad coalition, hoping to create a stable government with a stronger popular mandate.
He says Mr Samaras will push for a lightening of the bailout terms from Brussels, arguing that Greeks have accepted more pain by electing a pro-bailout party and that Europe should now cut Greece some slack.
Tough austerity measures were attached to the two international bailouts awarded to Greece, an initial package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up last year worth 130bn euros.
Sunday's vote was watched around the world, amid fears that a Greek exit from the euro could spread contagion to other eurozone members and deepen the turmoil in the global economy.
Stock markets responded positively to Sunday's results, with share prices up in Asian trading.
BBC business editor Robert Peston says the results have been seen by investors as avoiding the worst short-term outcome, which would have been political paralysis followed by a messy exit from the euro.
'No time to waste' In a statement on behalf of the 17 eurozone finance ministers, Luxembourg Prime Minister Jean-Paul Juncker said that "continued fiscal and structural reforms are Greece's best guarantee to overcome the current economic and social challenges and for a more prosperous future of Greece in the euro area".

“Start Quote

There will be no more adventures. Greece's place in Europe will not be put in doubt”

Antonis Samaras New Democracy leader

In a joint statement European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy also hailed the result, and expressed hope that a government would be formed quickly.

German Chancellor Angela Merkel telephoned Mr Samaras to congratulate him on his victory.
A German government statement said she had "stated that she would work on the basis that Greece will meet its European commitments".
Mr Samaras said that the Greek people had voted to stay in the eurozone.
"There is no time to waste," he said. "A national salvation government must bring economic growth and reassure Greeks the worst is over."
He added: "There will be no more adventures. Greece's place in Europe will not be put in doubt," promising that Athens would "honour its obligations".
Our correspondent, Mark Lowen, says this suggests that Mr Samaras wants to press ahead with spending cuts demanded by the country's international creditors.
European leaders have warned that if the new Greek government rejects the bailout, the country could be forced to abandon the single currency.

Syriza leader Alexis Tsipras: ''We will continue our struggle''

New Democracy should be able to build a majority coalition with the socialist Pasok, benefiting from a rule which gives the leading party 50 extra seats in the 300-seat chamber.
However, coalition talks may not be easy.
In addition to Syriza's showing, four other parties which oppose or want a radical overhaul of the bailout look set to take between 60 and 70 seats. They include the far-right Golden Dawn, which has about 7% of the vote.
New Democracy and Pasok have said they will keep the bailout in a renegotiated form.
The leader of Pasok, Evangelos Venizelos, proposed a broad four-party coalition including New Democracy, Pasok, the Democratic Left and Syriza.
"No decision can be taken without this national unity," he said.
BBC

Brotherhood claims victory in Egypt Presidential vote

Egypt’s Muslim Brotherhood has claimed victory for its Presidential candidate Mohamed Morsy who had been pitted against Ahmad Shafiq in a bitterly contested runoff that took place in the midst of an assertion of political power by a military group, marked by the dissolution of an elected lower house of parliament and an attack on civil liberties.

"Mohamed Morsy is the first popularly elected civilian President of Egypt," read a brief but triumphant message on the official website of Brotherhood's Freedom and Justice Party (FJP).

Later, flanked by senior leaders from the FJP at a press conference in the early hours on Monday, Mr. Morsy pledged inclusivity and called for unity. "I will be a brother and servant to all Egyptians," he said. He added: "Thanks be to God who has guided Egypt's people to the path of freedom and democracy, uniting the Egyptians to a better future."

During his interaction with the media at the party’s Cairo headquarters, he promised “to build a democratic and modern state with a constitution". As he concluded his address, Mr. Morsy’s supporters broke into the national anthem — a carefully choreographed exercise to symbolise national unity and pride.

By daybreak, Mr. Morsy’s jubilant supporters had taken to the streets, in convoys of cars that honked in unison and chanted their candidate’s name. As the morning mist lifted over the Nile, houseboats played loud music in celebration of an historic event. Small crowds, waving Egyptian flags, also began to gather at Cairo’s Tahrir Square, the icon of the Egyptian uprising, where Mr. Morsy was later scheduled to make and appearance.

The Brotherhood claimed that Mr. Morsy had won 52.5 per cent of votes while Mr. Shafiq, a former aviator and the last Prime Minister of ousted President Hosni Mubarak, secured 47.5 percent. Mr. Morsy’s campaign official Ahmed Abdel Atti said that the FJP was claiming victory after 98 per cent of the votes had been counted. But supporters in Mr. Shafiq’s campaign headquarters deplored the Muslim Brotherhood’s triumphalism. Ahmed Sarhan, Mr. Shafiq’s campaign spokesperson described the Muslim Brotherhood’s claims as “'absurd' and an exercise in “media manipulation”.

However, Reuters quoted another campaigner acknowledging that their leader was unlikely to make it past the finishing line.

Despite the conclusion of its first presidential election, Egypt’s fledgling democracy suffered a grave setback on Sunday when the Supreme Council of the Armed Forces (SCAF), a military clique that has been in charge of the country’s post-Mubarak political transition, issued a decree that severely curtailed presidential powers. With the Parliament already dissolved last Thursday, SCAF would now be in charge of making laws and controlling the budget.

The President has also been denied powers to declare war, unless the decision has the approval of SCAF — a move that implied that the military would not function under pervasive civilian control.

The decree issued on Sunday night as the counting of votes proceeded was denounced by pro-democracy Liberal and Islamist groups as a “military coup”.

“The ‘unconstitutional declaration’ continues an outright military coup,” tweeted Abdel Moneim Abul Fotouh, a moderate Islamist who had lost elections during the first round of the presidential vote. "We have a duty to confront it."

Elder statesman Mohamed ElBaradei said that the military’s declaration was a “grave setback for democracy and revolution”. "SCAF retains legislative power, strips president of any authority over army and solidifies its control," he tweeted. The Muslim Brotherhood condemned the decree as “null and unconstitutional.”

At the Brotherhood’s campaign headquarters, Mr. Ahmed Abdel Atti said that the SCAF’s ruling was likely to trigger “popular action,” setting the stage of yet another round of confrontation between the pro-democracy campaigners and an authoritarian military top brass. 

The Hindu

RBI keeps key interest rates unchanged

Contrary to market expectations, the Reserve Bank on Monday kept policy rates unchanged in view of rising inflation and global economic uncertainty, pulling down stocks markets sharply.

Besides, the central bank also kept cash reserve ratio (CRR) or the percentage of deposits that banks have to keep with RBI unchanged at 4.75 per cent.

RBI, in its mid-quarterly review of the monetary policy said future action would depend upon on external factors, domestic developments and inflationary risks.

“Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks,” RBI said.

Stock markets fell sharply after having opened high in the morning on rate cut hopes. However, after the RBI policy announcement, the BSE 30-scrip index, Sensex, fell by over 200 points to below 17,000-mark it had crossed in the morning trade.

Experts were expecting the Reserve Bank to cut the lending rate (repo) by at least 0.25 per cent and were also looking forward to further cut in CRR to infuse more liquidity in the financial system.

While the short term lending rate has been kept unchanged at 8 per cent, CRR remains at 4.75 per cent. 

PTI