Readings: Gold rush, Budget devils, Dollar inflows
- Report on Business: The new global gold rush
“As we see the traditional sources of gold production, like South Africa, like the United States, like Canada in decline, Russia is growing in prominence and in prospect,” Mr. Burt says. He suggests there are 300 million to 400 million ounces of untapped gold in Russia.
China produced 276 tonnes of gold in 2007, or roughly 9.7 million ounces. That was a 12-per-cent jump from 2006, GFMS said. By contrast, South Africa — the world’s largest gold producer since 1905 — produced 272 tonnes, an 8-per-cent decline from the year before.
Chidambaram announced a 600 billion-rupee ($15 billion) debt waiver for farmers. This sum, which amounts to a staggering 10 percent of the government’s tax revenue in the current fiscal year, would have sufficed to create 15,000 megawatts of new power-generation capacity, enough to significantly reduce the country’s perennial and debilitating electricity shortages.
As for the write-off, it doesn’t even show up as a budgetary expenditure. And that’s nothing short of a Houdini trick. Analysts aren’t yet sure just how the financial system will be compensated. One possibility is that banks will be given government bonds with which they can replace their impaired assets. Chidambaram himself has been evasive.
- Business Standard: Govt readies for surge in dollar inflows
At the beginning of 2007-08, the budgetary allocation for interest payments on the MSS bonds was Rs 3,700 crore. The allocation was raised to Rs 8,351 crore. For 2008-09, the finance minister has made a provision of Rs 13,958 crore for such interest payments.
In the first six months of the current financial year, gross external commercial borrowings (ECBs) rose, year-on-year, by 81.1 per cent to reach $14 billion.
Total portfolio flows into India — including proceeds of depository receipt issues and investments by FIIs — during April-December 2007 amounted to $32.8 billion against $7 billion in the whole of 2006-07.
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March 7th, 2008 at 6:00 am
It is true that a lot of the traditional gold producing countries have seen declined in the recent years. However we have also seen a particularly strong rise in output from Heavily Indebted Poor Countries of more than 85% between 1995 and 2005 with a potential for larger increase in the future.
This is good news for these countries as Gold mining companies source supplies locally and employ local labor where possible. Thus, even allowing for some necessary imports and for the remittance of profits and dividends, their impact on a developing country’s balance of payments is strongly positive. Gold mining, and metals mining generally, is essentially free of the distorting subsidies applied by some developed countries to agricultural production.