Hindustanis.Org

The economies of India and China are much smaller than previously thought, when measured by buying power in US dollars, according to data released on Monday, which could weaken their call for more clout at the IMF. The preliminary International Comparison Program report on purchasing power parity — or PPP — was coordinated by the World Bank and based on price data on goods and services in 146 countries, adjusted to reflect local cost and affordability, and converted to dollars.

The report has no bearing on the actual size of those economies, but rather looks at them with a different measuring tool — one that many emerging economies argue is a more accurate representation of their growing global influence since it takes their hefty buying power into account.

Many of those countries want the IMF to take PPP into consideration, when allocating voting rights, a contentious issue that is expected to be high on the agenda at the fund’s spring meetings in April 2008.

An IMF spokesman said there was “growing consensus” that PPP should play a role in determining voting quotas, which would raise the relative weight of developing countries.

“The impact on individual countries depends on the data for them and this new set of PPP data will ensure that any calculations done for PPP purposes will reflect the most up-to-date situation,” IMF’s William Murray said in an e-mailed response to questions.

PPP is designed to provide an apples-to-apples comparison for the buying power of countries around the world, and also gives insight into the cost of living, consumer spending and investment from country to country.

One of the best-known examples is the “Big Mac Index,” which compares the cost of the same McDonald’s sandwich in different countries.

The report takes data collected by the World Bank, Eurostat and the Organization for Economic Cooperation and Development to calculate each country’s PPP for 2005. (http://www.worldbank.org/data/icp)

China’s share of the global economy in terms of PPP fell to 9.7 per cent from an estimated 14 per cent. This was the first time that China participated in the survey, so the prior figure was calculated last year by extrapolating from old data, using a model that has since proved to be faulty.

India’s share of the world economy based on PPP dropped to 4.3 per cent from a previous estimate of 6 per cent. This was the first time India had participated in the survey since 1985.

“These are changes in estimates, the previous ones having been based on very old and very limited data,” the ICP report noted. “The real outputs of their economies have not changed, only the way we measure them has.”

Political Ramifications

When measured by market exchange rates instead of PPP, China’s share of world GDP is just 5 per cent, and India’s is less than 2 per cent — about half of their size using PPP. That explains why the report may have political ramifications as fast-growing emerging markets fight for more say at the IMF.

Emerging markets argue that the big industrialized countries have too much influence over the fund, in part because voting rights do not take into account PPP — something they hope will change in the IMF’s revised quota system.

But because India and China are smaller than previously thought in PPP terms, they may have a harder time winning support for sizeable increases in their voting rights.

Some industrialized countries worry that China and other emerging markets will surpass them in voting power if PPP is taken into consideration. In PPP, China is the world’s second- biggest economy, behind only the United States. By market exchange rates, it trails countries such as Japan and Germany.

The report shows that 12 countries account for more than two-thirds of the world’s output, including five emerging economies: China, India, Russia, Brazil and Mexico.

Overall, the results show that the size of the world economy measured in PPP terms is smaller than previously estimated. Asia’s economies are one-third smaller than previously thought, largely because of the downgrades to India and China, while Africa’s are one-fourth smaller.

Source - Express India 

For the first time ever, Google has included India in its 2007 end-of-year Zeitgeist annual report.

Zeitgeist pulls together interesting search trends and patterns, and gives search statistics automatically generated based on the billions of searches conducted on Google.

The list is a cumulative snapshot of interesting queries asked by users over time, within country domains, and some on Google.com.

This year’s Zeitgeist also includes an aggregation of search queries on Google’s Indian domain. It reflects both — the most popular, and the fastest-rising global search terms that people have typed on to Google.

The top gaining queries in India for the month of November include: Bank of Maharashtra, easymovies, Income tax department, Pan Card, Lord Hanuman, Maruti True value, Sony Cybershot, Harry Potter, Goa hotels, Hindu astrology, Indigo, Tata Mutual Funds, Financial Express, Logitech, and Miss India.

In the 2007 Google Zeitgeist list, the 10 fastest rising terms globally include iPhone, badoo, facebook, dailymotion, webkinz, youtube, ebuddy, second life, hi5, and club penguin; while the 10 fastest falling terms globally include world cup, Mozart, fifa, rebelde, kazaa, xanga, webdetente, sudoku, shakira, and mp3.

In a separate development, speculation is rife that Google might soon come up with an Indian version of its cross-language information retrieval (CLIR) facility that searches queries in English, while giving results in native languages.

However, there is no confirmation on which languages will be deployed. Meanwhile, the CLIR service can accessed at www.translate.google.com

IBM Corp.’s expansion in developing countries shows no sign of relenting. The technology company revealed Friday that it now has 73,000 employees in India, almost a 40 percent leap from last year.

IBM did not provide updated figures for its work force in the U.S., which has held steady around 125,000 people in recent years.

Nor did IBM project its total head count. It had 355,766 employees worldwide at the end of 2006.

If the total has risen by the same rate as in 2006, almost one in five IBM workers now is in India, its second-largest center.

Like many other technology providers, IBM has rushed to take advantage of the lower labor costs India offers even for highly skilled workers. IBM’s base in India numbered only 9,000 people in 2003, but it was about 53,000 last year.

IBM has been stressing not only the lower expense of working in India but the potential of the Indian market. IBM executives told visiting Indian journalists last week that the company expected to see revenue from the Indian market jump to nearly $1 billion this year, from $700 million in 2006.

Armonk, N.Y.-based IBM is also ramping up in other key developing markets. Its chairman and chief executive, Sam Palmisano, recently formed a new organization that will spur IBM’s investment in emerging economies.

The plan is meant to capitalize on the higher growth rates in the so-called ”BRIC” countries of Brazil, Russia, India and China. IBM’s revenue from those countries rose 18 percent in the first three quarters of this year, even after discounting the benefit of currency fluctuations. IBM’s total employee count in those countries now is nearly 100,000, up from 70,000 a year ago.

IBM’s vice president of financial management, Jesse J. Greene Jr., would not forecast how much more hiring the company still might do in emerging markets. However, he said ”we see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.”

Source - Tech2