Indian airlines industry growing

India has an expanding economy. With the rising incomes and a large population of young people eager to travel, airlines are taking aggressive strategies to attract them for higher revenue. The emerging economy along with a travel minded youth class has made India the world’s fastest-growing and most competitive aviation market. Domestic passenger traffic is expected to double to 60 million by 2010 and reach 200 million by 2020. Currently, some 650 air flights take off daily from India’s 95 operational airports; this rate was only 200 three years ago. That figure is likely to nearly double to 1,200 by 2010.

Industry consolidation started rolling ever since a crop of eight new airlines hit the Indian skies in the last three years. Most were budget carriers set up by entrepreneurs who quickly placed tremendous downward pressure on fare prices. They all have been chasing the estimated 300 million middle-class Indians who have been enjoying rising disposable incomes and now have the financial wherewithal to travel at home and abroad. The lucrative market also encouraged merger of the state-run domestic and international carriers—Indian Airlines and Air India. Chennai-based business carrier Paramount Airways plans to acquire a substantial stake in GoAir, another no-frills budget carrier. Among India’s passenger carriers, however, the outlook is challenging as long as the fare wars continue. Discounted tickets represent 20% of total fares in India vs. a global average about 10% to 15%. On top of that, the scarcity of airports in India has meant higher landing and maintenance fees, another drag on profits.

Major international aircraft manufacturers such as Boeing, Airbus, ATR, and Brazil’s Embraer are knocking to win orders. Boeing plans to increase sales of its 125-aircraft fleet by double by 2011. If so, that would mean about a $20 billion revenue haul for Boeing. With more than 100 Airbus planes operating in India, the European concern’s new orders have come from startup airlines such as Air Deccan, Kingfisher, Spice Jet, and GoAir.

Indian skies are now so congested that it’s not unusual for passenger jets to spend an hour circling around an airport and waiting for a landing slot, which drives up the fuel costs even on short-haul trips and adds up to 10% in additional costs.

The three consolidated groups Air India, Jet Airways, and Kingfisher dominate the Indian skies with an 85% market share. Other low-cost carriers could be in play soon. Needs for engineering, maintenance and repair, ground services, and route networking and planning has come up. Indian authorities should respond quickly to smooth up the flying of the airlines so that the industry can grow as expected.

Coca cultivation in Latin America

Areas of coca cultivation grew in Peru and Bolivia last year but decreased in Colombia, a report by the United Nations Office on Drugs and Crime said. According to the report, cultivation of coca grew eight percent in Bolivia and seven percent in Peru but fell in Colombia by nine percent; which looked at cultivation in the Andes, the main cocaine-producing region in the world. A total 156,900 hectares were used to grow the plant last year in the region, down from 159,600 in 2005 a 2% drop – the report concluded.

On the whole, demand for cocaine has remained steady throughout the world, with a slight increase in Europe offset by a decline in the US.

Even, since 2000, coca cultivation in the Andean region has fallen by almost 30 percent to 158,000 hectares. This is a dramatic decline, and a signal that governments and farmers are committed to eliminating drug cultivation. Though in the Andean region, the struggle is still on between, on one side governments and citizens committed to legitimate industry and prosperity, and on the other side, narco-traffickers intent on preserving the status quo.

Despite observing a decreasing tendency, Colombia is a leading producer of coca and much of the country’s coca is grown by poor farmers because it generates more income than any other crop. According to the director of Amazon Institute of Scientific Investigation, 1.8 million hectares of rainforest in Colombia have been destroyed to make room for drug plantations.  Government has long battled a cocaine-fueled insurgency in its remote regions. In an effort to destroy the rebels’ chief source of income, the Colombian government has targeted coca fields with aerial spraying of herbicides. Coca provides the key ingredient in cocaine and its eradication is a fundamental part of the US-backed war on drugs. But despite a lower area of cultivation and efforts by local law enforcement agencies to destroy clandestine laboratories and seize merchandise, Colombia remains the world’s biggest coca grower and is responsible for 62 percent of the world’s supply of cocaine.

Reducing coca cultivation requires tackling other aspects of the drug trade, including cutting supply and demand and halting trafficking. Measures taken in Peru to tackle coca production paid off. All Andean countries require greater support for development assistance that can generate growth and create brighter prospects for communities at the beginning of the supply chain.

While the coca plant can be found throughout most of Latin America, varieties containing the cocaine alkaloid are cultivated and converted primarily in Peru, Bolivia and Colombia. While methods of cultivating the coca plant are similar in many ways throughout Peru, Bolivia, and Colombia, there are differences in techniques because of terrain, tradition, and other factors.

Laos’s coup defendants plead not guilty

Ten people accused of plotting to overthrow the communist government of Laos were pleaded not guilty by an US court. Last week, a grand jury accused Vang Pao, a 77 year old ex-general in the Royal Army of Laos and nine other members of California’s Hmong community. Among the charged, was Harrison Jack, a former Army Ranger who worked with Hmong fighters during the Vietnam War.

The charges created a fear among California’s Hmong community, which includes thousands who fled following the 1975 takeover of Laos by the communists. On 18 June, a crowd of up to 1,500 people who feel that the US government has not done enough to stop the harassment of Hmong in Laos, demonstrated outside the federal courthouse in Sacramento and demanded a fair trail.

All 10 are charged with conspiring to violate the Neutrality Act against a nation with which the US is at peace; conspiracy to kill, kidnap and maim; conspiracy to possess firearms and destructive devices; and conspiracy to export munitions without a State Department license. The indictment says that alleged conspirators were meeting with a person they believed was a weapons broker but who actually was an undercover federal agent at a Thai restaurant in Sacramento last February. According to the indictment, after the meeting, they examined a truckload of weapons that contained samples of AK-47s, M-16s, C-4 explosives, anti-tank rockets, rocket-propelled grenades and Claymore mines.

Judges have refused to set bail during previous hearings, saying the defendants could be a flight risk or pose a danger to society. Federal prosecutors say the defendants intended to buy nearly $10 million worth of weapons. Earlier this year, Jack, a former California National Guard officer, sent an e-mail to friends suggesting the Lao government was planning mass killings of Hmong remaining in the country. That apparently was the origin of the alleged 10’ planning to overthrow the government

The Hmong, a mountain people, helped US forces during the Vietnam War. Those who stayed behind after Laos fell to the communists have been subject to severe persecution. Many have fled to Thailand, where they live in refugee camps. Those who came to the US are concentrated in California, Minnesota and Wisconsin.

Vang Pao was confident of broad support in Laos for a coup, including from former military officers. He foresaw gathering 1,284 battle-ready troops and another 10,000 unarmed opposition party members. His plan included bombing government buildings, shooting down military aircraft and shutting down transport links. Martial law would have led to the establishment of a temporary government, giving way to elections after two years.

UK warns against travel to southern Philippines

The United Kingdom advised its citizens against all travels around Mindanao, the southern Philippine island, following the abduction of an Italian Catholic priest and a fatal bus explosion in the region. Travel to areas of Sulu, Basilan, Tawi-Tawi and Jolo, where anti-government groups are active, is strongly discouraged due to ongoing military and police operations against the rebels.

The warning was issued by the British Foreign and Commonwealth Office said in the travel advisory. Theban was imposed because, terrorist groups continue to plan attacks and have the capacity and the intent to carry out these attacks at any time and anywhere in the Philippines. It added that attacks could be indiscriminate and against civilian targets in public places including those frequented by foreigners. British travelers were also advised to be aware of the risk of terrorist attacks to road, rail, sea and air transport in the Philippines.

Terrorists and criminal elements plan to kidnap foreign tourists from islands and coastal areas in the southern Philippines, it added. The 57-year-old Italian missionary, Giancarlo Bossi, was seized by armed men on June 10 in Zamboanga, southern Mindanao. His kidnappers are reportedly demanding ransom in exchange for his release. The bomb explosion on a bus at Bansalan, Davao del Sur province in the same region, killed eight people and injured 18 others on 15 June 2007.

The US tightens up military exports to China

Despite protests from some major corporations, the US government tightened regulations on exports of aircraft engines, high-performance computers and other technologies that possible have military uses to China.

The Commerce Department of the US added 31 new products requiring special export licenses in hopes of keeping them out of the hands of China’s military, which is growing in a high rate. The licenses, which companies complain are complicated to obtain, try to assure that technology sold to civilian companies doesn’t end up being used to improve Chinese missiles and other weapons.

This move is because the US is trying to balance economic needs with growing concerns about the communist nation’s rapid military modernization and access to advanced Western technology. But the US corporations say the new rules, proposed last summer and sharply criticized since, won’t be effective because China can buy many of the so-called ‘dual-use’ products easily from other countries. What the regulations will do, companies fear, is drive away Chinese business at a time when the US trade deficit with the world’s most populous nation is towering.

The trade deficit reached a record high of $233 billion in 2006. The rules change further puts US companies at a disadvantage. The long-term impact will be people dropping out of the Chinese market and less trade. Because of the rapid growth of its economy and military, China is one of the largest foreign markets for exports that require licenses. In 2006, nearly 10 percent of all US export licenses were for sales to China, worth about $2.4 billion. US companies exported $55 billion in licensed and unlicensed goods, which include such wide-ranging products as iPods and soybeans, to the country last year. Federal officials listened to some of the criticism and trimmed the number of new products on the list by about a third.

The US government categorizes countries by their potential security threat, and then limits the export of products that can be used for purposes such as waging terrorism, building missiles or developing nuclear weapons. Dozens of products already are restricted for sale to China. In many cases, those items also have harmless civilian uses such as high-powered computers, for example, are used in advanced weather forecasting — and U.S. officials allow the exports if companies can prove the technology won’t end up in the wrong hands.

In July 2006, the Commerce Department’s Bureau of Industry and Security proposed requiring licenses for the sale of 47 additional products to China. Among them were types of computers, aircraft, semiconductor equipment, navigation systems and telecommunications components. To offset the effect, the bureau proposed a new program that would exempt sales to Chinese companies that undergo special clearance reviews validating they do not deal with the military.

The regulations affected companies such as The Boeing Co., Sun Microsystems Inc. and Applied Materials Inc. Companies submitted evidence about products on the new list that were easily available from other countries or even in China.

Drug trafficking – Mexico’s growing cancer

Drug trafficking is bringing Mexican people an indescribable number of problems. Socially, politically and economically – the evil hand of drug trafficking is hampering at large. President Felipe Calderon may be the constitutionally elected leader of the nation, but in reality, drug cartels and warlords exercise vast authority over much of the area.

Calderon is now firmly installed as the president of Mexico, after having survived Andres Manuel Lopez Obrador’s strong post-electoral challenge. He has shown that he is ready to tackle his country’s major problems, which are organized crime and gross impunity. In reality, he is having a tough time.

Drug trafficking overpoweringly is the prevailing social problem throughout the country, particularly along the border with the US. In spite of lengthy declarations by government officials in Mexico City and Washington, and their insistence that important battles are being won against drug trafficking, criminal organizations like the Tijuana cartel continue to thrive, ruling over whole sections of the Mexican countryside.

The drug cartels continue to rule with no sure sign of their power decreasing anytime soon. Looking over a long history of disappointment and failure of the government in controlling this, it is unlikely to save for episodic and criminal activities are likely to decrease. To a great extent this is due to Mexico’s unrefined corruption and the fact that the nation’s institutions are not strong enough to stand up to threats, bribes, unremitting violence, and civic rectitude, when upward of 50 billions of tainted dollars are in play.

During the US President G. Bush’s two day stopover in Mexico in recent past, he wasted no time in praising the accomplishments of the Calderon administration in combating drug trafficking. Declarations made by Bush and Calderon should be seen as symbolic more than anything else. Both leaders likely realize that whatever initiatives taken to stop drug trafficking from Mexico into the US, including the recent operations by Mexican security forces as part of Calderon’s offensive on organized crime, have not succeeded to any marked degree in changing the course of the drug war in Mexico.

Dams in Brazil

In recent weeks, the Brazilian government decided to work on the difficult task of building giant hydroelectric dams in the Amazon River. The project presents President Luiz Inácio Lula da Silva with a major challenge between his ambitious economic development plan based on large-scale infrastructure, and the enormous social and environmental costs of the dams. On the one hand, dam construction plays a critical role in the government’s large-scale infrastructure initiative called the Program to Accelerate Growth (P.A.C.). The P.A.C. is a multi-year public works program designed to advance economic development by promoting incentives for infrastructure expansion, including building large dams in the Amazon. On the other hand, the president must confront the reality that the mega-projects in the Amazon could cause enormous and irreversible environmental and social impacts, and that they face considerable obstacles under Brazil’s demanding environmental laws.

The hot-button issue is the plan to build two large dams at the Santo Antônio and Jirau rapids on the Madeira River in the Amazonian state of Rondônia. The projects would dam the Amazon’s principal tributary, causing dramatic changes to the riverine ecology and affecting thousands of families who depend on the river for income, nutrition, and agriculture. With a combined generating capacity of 6,450megawatts, government energy planners insist the Madeira dams are essential to avoiding blackouts in the next decade. Yet following more than two years of analysis, Brazil’s environmental agency, IBAMA, recently issued a finding that it cannot give the go-ahead for the controversial project, citing insufficient information with which to make a decision.

The Brazilian electric sector has launched a torrent of criticism against the environment minister, claiming that IBAMA is holding up Brazil’s development. The project’s effects on Bolivia could eventually block the project from moving ahead. Brazilian government officials (other than IBAMA) have tried to ignore the fact that for Brazil to build a dam that floods the territory of a neighboring country would require negotiating a complex set of treaties, in the absence of which Brazil would be guilty of violating international law. In addition to serious questions regarding the project’s environmental feasibility, Brazil may have trouble attracting sufficient private investment in the project due to questions about its economic viability.

Originally proposed as a source of cheap energy for the national grid, the project’s budget continues to grow. The latest estimate by the Brazilian Electrical Agency, Agência Nacional de Energia Elétrica (ANEEL), sets the cost for the Santo Antônio and Jirau dams at $13.2 billion, not including the additional cost—estimated by the government at up to $7.5 billion—of constructing 2,400 kilometers of transmission lines to connect with the central electricity grid. It also doesn’t include the costs of navigation locks, and the costs of building upstream dams to flood a series of rapids, making it possible for barges to travel from the mouth of the Amazon to the upper stretches of the Madeira’s tributaries.

President Lula faces a major dilemma with these dams plan and so far has responded with frustration and cynicism.