SILICONEER | NEWS DIARY | JANUARY 2011

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Consumers Being Stretched by a Surge in Food Prices

A protester in New Delhi wears a garland of onions to protest a price increase in the Indian staple.

Consumers in India are being stretched by a surge in food prices, which rose by more than 14 percent in December alone.

While price hikes have put many staple foods out of reach for India's poor, the cost of onions is stirring the greatest outrage. Onions, a pungent mainstay of Indian cooking, have jumped in price by 40 percent in the past year.

Analysts blame crop failures and a food distribution system that allows middlemen to manipulate food prices.

Onions are in short supply in the vegetable stalls that line the narrow alleys of south Delhi's I.N.A. market.

Grocer R.L. Setty says an unusually wet summer made for a poor harvest in many areas, that there were fewer onions, and the quality wasn't much good. Setty says he's hoping the price crunch will ease when the government starts bringing imported onions to Delhi soon.

Virender Khaneja, who sells spices at the Durga Masala Store, says it's not just onions — he's paying higher wholesale prices for all sorts of spices as well.

Khaneja says middlemen are creating fake scarcities by holding back certain commodities until the prices rise.

"Some market mafia are there," he says. "They keep five, six tonnes, maybe 10 tonnes [of produce] on the side," until the price goes up.

Ripul Oberoi, a doctor shopping at the market with his wife, says the result is that prices seem to go higher every day. "And for a consumer, for a middle-class person, or slightly below middle class, it's very difficult to have the daily routine items that everybody has to have to survive," he says.

Jayati Ghosh, a professor of economics at Jawaharlal Nehru University in Delhi, says the real pain is being felt by India's poor majority.

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India Police Clear Citibank CEO in Fraud Case

Vikram Pandit

Indian police have said they had no intention of charging the chief executive or other board members of U.S. banking giant Citigroup over claims of fraud at a local Indian branch.

The senior managers, including Citigroup's Indian-born CEO Vikram Pandit, were named in a complaint by Indian businessman Sanjeev Aggarwal who lost money in the fraud at a branch near the capital New Delhi.

"It is only the complainant who has named these persons and not the police," said Surjeet Singh Deshwal, police commissioner in the town of Gurgaon where the fraud was reported in a Citibank branch.

"As per our investigations, remotely settled authorities cannot be held responsible for a local incident," Deshwal told AFP, a day after India's central Reserve Bank of India promised an independent probe into the fraud.

"We are only investigating how the local branch of the bank has acted," Deshwal added.

Recently, police arrested Gurgaon Citibank employee Shivraj Puri on charges of duping investors and diverting more than four billion rupees ($88 million).

Businessman Aggarwal who filed the complaint against Citigroup executives claims that the fraud "points to a systemic failure" in the global bank for which senior management should be held responsible.

Responding to Aggarwal's complaint, Citibank had said in a statement that "claims against senior executives are completely without basis and we intend to contest them vigorously."

Investigations have shown that employees at the bank in Gurgaon, where many international companies are based, had forged letters to divert funds and sell fake investment schemes.

A senior manager working for India's biggest motorcycle maker, Hero, has also been arrested in the case.

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PM: End Drone Attacks

Angelina Jolie meets Yusuf Raza Gilani in Islamabad

Pakistani Prime Minister Syed Yousuf Raza Gilani told state television he is using diplomacy to seek an end to U.S. drone aircraft attacks on militant targets.

In the first-ever live telecast from his official residence in Islamabad, Gilani responded to a question about his stance on the use of the unmanned missile-launching aircraft, the Dawn newspaper reported.

"Pakistan is a responsible nuclear state which cannot take any irresponsible step to stop U.S. Predator attacks," Gilani said. "We are, however, confident that we will be able to persuade the world and the United States to stop the drone attacks as they affect attempts to isolate militants from non-combatants."

There is some public dissent about sovereignty and the U.S. drones, which have been flying over the northern tribal belt for some 30 months, the Pakistan Observer said. U.S. officials maintain the area is being used as a haven for militants who can cross into Afghanistan along the porous border.

The Observer said more than 1,300 people have been killed by some 250 Predator attacks.

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Monitoring Peace

A special panel with representatives from major political parties, including the Maoists, will monitor Nepal's stalled peace process after the exit of the UN agency UNMIN from the country on Jan. 15.

The caretaker government has said it would monitor the 19,000 combatants and arms of the Maoists, who are presently housed in United Nations Mission in Nepal supervised camps, after the agency of the world body departs this month.

The mandate of UNMIN, which was established by the world body as a special political mission in 2007 to manage the arms and armed personnel of the Maoists and the Nepal Army, is set to expire Jan. 15, 2011. It has started the process to begin the pullout from the country.

The Special Committee comprising representatives from the major political parties, including the main opposition UCPN-Maoist, will shoulder the responsibility of monitoring the Peoples Liberation Army of the Maoists and their weapons, the government said.

"The Special Committee Secretariat will take charge of supervising and monitoring functions currently being carried out by the UNMIN," the government said in a letter sent to UNMIN chief Karin Landgren.

Bimal Prasad Wagley, the secretary at the Prime Minister's Office and the Council of Ministers, wrote the letter to the UNMIN on behalf of the government.

The government has asked the UNMIN to hand over arms containers, details of arms and armies, documents retained by the Joint Monitoring Committee and other logistics.

The withdrawal of the UN agency has sparked a row between the ruling alliance and the main opposition, who want the term of the UNMIN to be extended.

The ruling alliance, which has accused the UNMIN of favoring the Maoists, has ruled out a rethink on the issue.

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Ticket Frenzy

A queue for ICC World Cup tickets in Dhaka.

Cricket fans clashed with police in Dhaka, as crowds jostled to buy the first tickets put on sale for the ICC World Cup.

Thousands of people had queued overnight outside banks to get seats at the showpiece event, jointly hosted by India, Sri Lanka and Bangladesh, which opens Feb. 19 in Dhaka with a match between India and Bangladesh.

Police reported that fans were angered after bank authorities said that each branch would sell only 500 tickets due to strict scrutiny of buyers' identification papers.

A small number of fans and one news photographer suffered minor injuries as police broke up protests, officials said.

"They raised slogans and held demonstrations. We dispersed the protesters and maintained calm," police inspector Shah Alam told AFP.

Frustrated fans also damaged several cars in the northern outskirts of the capital, media reports said. Local police chief Abdul Malek said one bus had its windows smashed.

Hundreds of people had braved chilly temperatures in overnight queues that stretched more than two miles (three kilometers) outside some banks in busy commercial areas of Dhaka.

The country is hosting eight matches between February 19 and April 2, including matches against England, the West Indies and South Africa.

The Bangladesh Cricket Board (BCB) has set aside just 15,000 public tickets per match, which went on sale at 80 branches of the private City Bank and state-owned Agrani Bank on Sunday.

"Everyone in this country of 150 million people wants to see the World Cup matches in the stadium. People have become simply crazy," said G.S. Tamim, a BCB director and head of its World Cup ticket committee.

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Power Plans

India is exploring the possibility of building transmission lines via Bangladesh to supply power to that country and to transmit electricity between the northeast and the rest of India, union Power Minister Sushil Kumar Shinde said.

'We should be very cooperative to meet the growing needs of electricity both in India and our neighboring countries,' Shinde said at a seminar in Agartala on “Opportunities in Power Sector.”

“According to the projections of the 17th Electric Power Survey, over 100,000 MW of power would be required by the end of the 12th (Five Year) Plan (2012-2017),” he said.

The minister said that 50 percent of the capacity addition of 66,000 MW during the 12th Plan was expected to be contributed by the private sector. This sector contributed 10 and 32 percent to power generation in the 10th and 11th plans respectively.

He said several private-public projects were being executed for manufacturing power plant equipment, including turbines. “Non-availability and delayed supply of equipment was one of the major reasons for sluggish capacity addition,” he said.

The day-long seminar was jointly organized by a media group and the Tripura chapter of the Institutions of Engineers.

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MQM Quits

A MQM rally in Karachi.

Pakistan's Muttahida Qaumi Movement has quit the coalition government and will now sit on the opposition benches in the National Assembly, a party spokesman has said.

"It has been decided. We will sit on the opposition benches in the National Assembly and the senate," Wasay Jalil said.

Yousuf Raza Gilani, Pakistan's prime minister, has said that the Pakistan People's Party government will not collapse in the wake of the withdrawal of the coalition's second largest party.

The move comes after two of the party's ministers quit the federal cabinet, in protest against government plans to impose a new reformed general sales tax.

Speaking to Al Jazeera, the MQM's deputy parliamentary leader cited government corruption, rising prices and a regressive tax policy as the factors behind the move.

He also said that his party is not seeking to destabilize or overthrow the government.

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Indian Held

Nepal police arrested an Indian near the Indo-Nepal border for allegedly carrying a firearm.

According to police, Munna Lal Kurmi, a native of Balrampur district in Uttar Pradesh was arrested from Bahadurganj in southern Nepal's Kapilavastu district. Kurmi was allegedly carrying a pistol.

Border districts in both Nepal and India are plagued by cross-border gangs and armed groups, which have been found to be involved in growing numbers of kidnapping, armed robbery, extortion and even contract killings.

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