US urges Egypt to commit to 'durable democracy'

U.S. Secretary of State Hillary Rodham Clinton on Sunday urged Egypt to commit to "a strong, durable democracy" that protects the rights of all citizens, hoping to appeal both to supporters of the popularly elected Islamist president and minorities fearful of being repressed by their new government.

The United States will "look to any elected government to support inclusivity, to make sure that the talents of every Egyptian can be put to work in building a new future for this ancient and incredibly important country," Clinton told a group of prominent women.

With post-Hosni Mubarak Egypt locked in a political impasse, Clinton shuttled between meetings with the new president, Mohammed Morsi of the Muslim Brotherhood, and the generals who took power after Mubarak's fall.

She tried to exert what influence Washington still has with the army chief whose key role is splitting the country between those who see the military as a threat to democracy and those clinging to it as a guarantor of stability.

The political transition was a central topic in talks with Field Marshal Hussein Tantawi, as were Egypt's economic needs. Clinton later outlined the U.S. position during the session with the Egyptian women.

"I came to Cairo, in part, to send a very clear message that the United States supports the rights, the universal rights of all people," America's top diplomat said. "We support democracy. But democracy has to be more than just elections. It has to mean that the majority will be protecting the rights of the minority."

She said that "Egyptians have sacrificed so much to get to this moment," and that "a strong, durable democracy that respects the rule of law, that protects the right of all is the best way forward for Egyptians to realize your aspirations."

Clinton wants the military to work with the new Islamist leaders on a full transition to civilian rule. But with the U.S. having already approved yet another massive delivery of military aid, it was unclear what leverage Washington has as it seeks to stabilize Egypt and build a new relationship with America's once ironclad Arab ally.

Not long after meeting with Clinton, Tantawi raised the stakes in the standoff, saying the armed forces will not allow a "certain group" to dominate the country. Tantawi did not mention a specific organization, but his comments in the city of Ismalia were clearly referring to Morsi's Brotherhood.

Tantawi's council of generals curtailed Morsi's powers on the eve of his inauguration last month and enforced a court decision dissolving the Islamist-dominated parliament. Together the actions have created an atmosphere where no one is quite sure who is in control and where Egypt is headed.

Seventeen months after the street demonstrations that ousted Mubarak, the United States is left without a friend and with little influence among a host of old and new political actors who can't seem to chart a mutual path forward.

Calling for compromise and consensus on Saturday after her first ever meeting with Morsi, Clinton staked out a middle ground in the dispute. Yet the immediate effect of her exhortations was nothing.

For the Obama administration, the old prism supporting Egypt's military leaders as bedrock allies shattered with Mubarak's demise. It wants to safeguard U.S. interests in the region, from counterterrorism cooperation to Arab-Israeli peace efforts, but its agenda remains on hold while the Arab world's most populous nation remains mired in turmoil. The lack of clarity over who is going to prevail from Egypt's political maneuvering is only adding to the paralysis.

Clinton, who earlier this year certified sufficient Egyptian action toward democracy for $1.3 billion in U.S. military aid to go through, carried the same message to Tantawi as Morsi.

Without taking a position in disputes over parliament or how to draft a new constitution, Clinton urged the military chief to return the armed forces to a "purely national security role," as she termed it Saturday.

Her criticism was muted, however.

Clinton commended the military for defending lives during the February 2011 revolution against the former president and for the progress Egypt made under its interim leadership, which included free and fair elections. And she contrasted the approach with how Syria's military is "murdering their own people," while recognizing that the Egyptian military authorities still needed to do more.

The United States is in a difficult spot, eager to be seen as a champion of democracy and human rights after three decades of close cooperation with Mubarak despite his abysmal record in advancing either. This has involved some uncomfortable changes, including occasionally harsh criticism of America's once faithful partners in the Egyptian military and words of support for Islamist parties far more skeptical of U.S. motivations for Egypt and the region.

Via ~ news.yahoo

RBI may cut repo rate by 25 bps, keep CRR intact

Will the RBI go in for a rate cut, or will it not?

This is the question that bothers many who are eagerly awaiting the apex bank's mid-quarter policy review slated for Monday as far as key rates are concerned.

Though a 100 basis point cut in the Cash Reserve Ratio has been speculated till three days back, the RBI is now facing fresh realities which could be the game-changers for the economy, in general, and the monetary policy, in particular.

The fresh triggers for concern on the inflation front for the apex bank are the increase in food and fuel prices and the more-than-expected hike in the Wholesale Price Index to 7.55 per cent in May from 7.23 pre cent in April.

The hike in minimum support price for paddy, oilseeds and pulses in the range of 15-50 per cent is set to increase inflationary pressures on the economy even if one wants to put up a brave front as regards the weakening rupee and contracting exports, industry experts say.

The statement of the RBI Governor, Dr D. Subbarao, on Thursday that growth had to be sacrificed to tame inflation in a way reflects a sentiment in the central bank that might be different from the market expectations of a big cut in the CRR to the extent of 100 basis points.

CRR cut?

The CRR cut now seems unlikely as the need for fresh liquidity is debatable at a time when corporate credit off-take is still low.

Further, a CRR cut without a corresponding repo rate cut is unlikely to result in immediate interest rate cuts by banks as has been demanded by the industry.

So, Dr Subbarao may prefer a cautious approach by keeping the cash reserve ratio untouched at the existing 4.75 per cent. At the same time, the industry concerns could be addressed by lowering the repo rate by 25 basis points.

This will give RBI a chance to wait-and-watch till next quarterly policy.

via ~ thehindubusinessline

Romney: Obama’s ‘doing fine’ comment wasn’t just misspeak

Mitt Romney doubled down on his efforts to cast President Obama as "out of touch," insisting Obama's declaration last week that the private sector is "doing fine" wasn't just a random gaffe.

Speaking at a rally in Orlando, Fla., Romney insisted Obama's remark "wasn't just one line taken out of context" and said it was just one of many signs that the current president "is so out of touch with what's happening across America."

"It is finally time to have a president who's in touch with what's happening in America, and I am," Romney declared, vowing that, if elected, he would restore the country's "strength."

Appearing in a battleground state that many consider a must-win for his campaign this fall, Romney took specific aim at Obama's health care law, arguing that it has been detrimental to the nation's economy because of the negative impact on small businesses that can't afford to pay for expanding health care coverage.

The Republican nominee also pointed to expanding cost estimates of what it will cost the federal government to pay for implementing the law.

"It's not just bad policy," Romney said, speaking against the backdrop of a sign that read "Repeal & Replace Obamacare." "It's simply unaffordable."

As he does at almost every single campaign event, Romney pledged to begin efforts to repeal Obama's health care law on "day one" of his presidency. In Florida, he acknowledged the issue of whether the law's mandate requiring individuals to obtain health care coverage or receive it from their employers is currently pending before the Supreme Court.

But "whatever happens," Romney told supporters in Florida, it will still be up to the next president to make a decision about what to do about the rest of Obama's health care law.

"I will repeal it," he vowed.

Via ~ news.yahoo

Pranab rejects S&P report, says India will see turnaround

Finance minister Pranab Mukherjee on Monday rubbished ratings agency Standard and Poor’s claims that India may be the first BRIC economy to lose investment-grade rating.

Reacting to the report, Mukherjee said that the government was fully seized of the current situation and he was confident that there would be a turnaround in the country’s growth prospects in the coming months.
He said that the warning from S&P was not based on a fresh rating action.

“Between April 2012 and now, there are no significant events to indicate that the economy’s vulnerability to shocks has increased, though growth numbers for the fourth quarter 2011-12 have come below the expectations,” Mukherjee said.

S&P had on Monday issued the warning that slowing GDP growth and political roadblocks to economic policymaking could be some of the factors that could lead to such an action.

“Setbacks or reversals in India's path toward a more liberal economy could hurt its long-term growth prospects and, therefore, its credit quality," said Standard & Poor's credit analyst Joydeep Mukerji in a report titled “Will India be the first fallen BRIC angel’, that examines the forecasts for economic growth, and the possible effects on business confidence and the government's commitment to economic reform.

The 'BBB-' long-term sovereign credit rating on India is currently one notch above speculative grade. A ratings cut would push up yields on the benchmark 10-year bond. Public sector units, including state-run banks, would be hit particularly badly, since their finances are closely tied to government finances. It could also drive down foreign investment into India, as global investors look to more stable destinations for returns.