(Premium) Gist of The Hindu: November 2012

Premium - Gist of The Hindu: November 2012

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India’s Current Account Deficit at a Glance

Asharp reduction in the current account deficit (CAD) from $21.8 billion in the last quarter of 2011-12 (January-March 2012) to $16.8 billion in the first quarter of the current year (April-June 2012) appears to have brought some joy to macroeconomic planners. It has been possible to bridge the lower CAD with almost the same level of capital flows that obtained during the previous quarter. India’s balance of payments is back in surplus. Important as this development has been in the management of the external economy, it is unwise to exaggerate its significance. The level of deficit is still way above what is considered prudent and manageable. Besides, the fall in the CAD is due to all the wrong reasons — falling imports that corroborate the slowdown, and decelerating exports. The outlook for software export earnings is not bright amidst the global slowdown. Expressed as a percentage of GDP, the CAD has fallen from 4.5 per cent to 3.9 per cent. Most experts have projected the CAD for 2012-13 at 3.5 per cent or lower, on the basis of certain key assumptions: that the economy will grow at a reasonably fast clip of around 6.5 per cent; oil prices will not go very much higher than current levels of around $100 a barrel; and most important of all, the actions of the European Central Bank and the Federal Reserve will help in bringing economic growth in Europe and the U.S. back on track. The last point will have an all-round bearing on India’s external economy. It could help India’s faltering exports regain traction. Second, there would be far less uncertainty on the movement of capital flows to India.

There is of course a flip side to all of this. India’s growth has already slipped by most accounts to below five per cent. The cheap money policy of the Federal Reserve will boost inflation worldwide. Although it is customary to view the CAD on a par with the fiscal deficit — the menace of twin deficits as they are usually referred to — it is the latter that has received greater attention. Besides, the government seems determined to adopt questionable means to finance the deficit rather than be proactive in reining it in. For instance, recent announcements to ease external commercial borrowings and encourage capital market flows from abroad might have had the intended effect of boosting stock prices. But these are not sound policies from the point of view of the macro economy. Encouraging foreign currency borrowing to take advantage of the surfeit of funds  circulating abroad is hardly the right strategy for an economy whose level of short-term debt has been rising and exchange reserves falling.

OECD’s Indian Connection

  • The Organisation for Economic Cooperation and Development (OECD) is engaged in advanced talks with the Ministry of External Affairs to open an India office. The possibility of India joining it is also on the cards, though that could be the long-term outcome of an ongoing dialogue.

  • The OECD, with headquarters in Paris, is one of the world’s largest forums for nations to work together to promote policies to improve the economic and social well-being of people.

  • An OECD team is in New Delhi for the Fourth OECD World Forum on Statistics, Knowledge, and Policy to discuss ways of measuring well-being and how it can contribute to effective and accountable government policy.

  • India is among five countries, others being Brazil, China, South Africa and Indonesia, where the OECD has established a process of “an enhanced engagement” with the possibility of membership, based on an OECD Ministerial Council mandate. It recently submitted three reports on Indonesia’s economics, regulations and agricultural sector.

  • In China, along with the WTO, it recently completed a detailed report on trade and value-added services.

  • The OECD’s prescription for India is that it should not be overly obsessed with China, since in the long run India’s growth will be sustainable and durable and is impacted by its democratic character, while its weakness lies in delayed decision-making due to excessive deliberation.

  • Furthermore, the OECD recently announced that the information technology sector will boom during the downturn — good news for India’s IT companies and Nasscom. It has said the total ICT spend will reach $4,406 billion in 2012, of which 58 per cent will be on communications services and equipment, 21 per cent on computer services, 12 per cent on computer hardware and 9 per cent on software.

  • Deeply concerned at the global economic slowdown, the OECD believes that this is the fifth year of the crisis. There is additional concern at trade flows having slowed down; while the world economies came out of the low point in 2009, growth seems to be dipping once more with the slowdown back again.

‘Match-making’ theory wins U.S. scholars Economics Nobel

  • Two American scholars were awarded the Nobel economics prize on Monday for studies on the match-making that takes place when doctors are coupled up with hospitals; students with schools; and human organs with transplant recipients.

  • The work of Alvin Roth and Lloyd Shapley has sparked a “flourishing field of research” and helped improve the performance of many markets, the Royal Swedish Academy of Sciences said.

  • Mr. Roth (60) is a professor at Harvard University in Cambridge, Massachusetts, and Harvard Business School in Boston. Right now he is a visiting professor at Stanford University in California. Mr. Shapley (89) is a professor emeritus at University of California Los Angeles.

  • Citing “the theory of stable allocations and the practice of market design”, the award focused on the problem of matching different agents in a market in situations where prices aren’t the deciding factor.

  • Mr. Shapley made early theoretical inroads into the subject, using game theory to analyse different matching methods in the 1950s and 1960s.

  • Together with U.S. economist David Gale, he developed a mathematical formula for how 10 men and 10 women could be coupled in a way so that no two people would prefer each other over their current partners.

  • While that may have had little impact on marriages and divorces, the algorithm they developed has been used to better understand many different markets.

  • In the 1990s, Mr. Roth applied it to the market for allocating U.S. student doctors to hospitals. He developed a new algorithm that was adopted by the National Resident Matching Program, which helps match resident doctors with the right hospitals.

  • Similar formulas have been applied to efforts to match kidneys and other human organs to patients needing a transplant, the academy said.

Deal on Scottish independence referendum

  • The British and Scottish governments signed a historic deal that will to allow Scotland to hold a referendum in 2014 on whether it wants to remain part of the United Kingdom or secede from the 300-year-old political union.

  • Under the terms of the agreement signed by Prime Minister David Cameron and Scotland’s First Minister and the leader of the ruling Scottish National Party (SNP) Alex Salmond in Edinburgh, voters will be asked to say “yes” or “no” to a single question: whether they want an independent Scotland?

  • The voting age will be reduced to 16. Mr. Cameron’s Conservative Party and the two other mainstream national parties — Labour and the Liberal Democrats — will campaign for a “No” vote.

  • The agreement was criticised by unionists who accused Mr. Cameron of “surrendering” to the SNP. He defended it saying that he wanted to “show respect to the people of Scotland”, who had voted for a party that wanted a referendum. But he insisted that Scotland would be “better off” with the U.K.

First woman chief of AU takes charge

  • Nkosazana Dlamini-Zuma waved an African Union flag, tapped a wooden gavel and became the first woman to take office as the Chairperson of the African Union Commission (AUC) at the A.U. headquarters in Addis Ababa.

  • Prior to her election, Dr. Dlamini-Zuma held positions as Health Minister under Nelson Mandela’s post-apartheid Cabinet in 1994 and as Foreign Minister under President Thabo Mbeki, but won most praise for transforming the Ministry of Home Affairs in the Cabinet of her former husband, and current South African President, Jacob Zuma.

  • Her ascension as AU Chairperson is a break with a tradition that has called for major regional powers like South Africa, Kenya, Nigeria and Egypt to refrain from controlling the A.U. chair.

Red marks in India’s green report card

CBD, having a very broad and all encompassing meaning, that includes all life forms and ecosystems. It is one of the most widely accepted international treaties, with 193 nations being a party to it. India ratified the CBD in 1994, and is now the host nation for the 11th Conference of Parties (COP 11), currently underway in Hyderabad. The “high level segment” is on the last two days. The working groups are discussing various technical issues from the last COP in Aichi, Japan. Civil society groups are organising side events at the venue. One of the most important issues is the operationalisation of the biodiversity targets decided on at Aichi. India is chairing the discussions, and leading the global discussion until the next COP in two years. Considering India’s role, it is worth examining the efforts at conserving our own biodiversity. There have been some well known success stories for critically endangered species. The only population of Asiatic lions in the world, in the Gir National Park, have more than doubled its numbers, moving from “critically endangered” to “endangered.” The Chambal river Gharials are doing well. The one-horned rhino has made a spectacular comeback, from about 200 to nearly 3,000 today. But, are these stories representative of what is happening in India? The major problem
with “biodiversity” is its all encompassing, immeasurable nature, especially with the CBD definition. According to scientist David Takacs, “though it has considerable technical and scientific resonance, it defies precise scientific definition.” There is the “Linnean shortfall” of knowledge, where we have been able to document only a small proportion — about 1.4 million of the 12-18 million species that exist on the planet. Exciting new species are being identified every day, some even becoming extinct before they are formally named and identified. The Wallacean shortfall refers to the incompleteness of our understanding of geographical distribution of species across the globe. With this huge gap in our knowledge of biodiversity, the approach taken across the world is to identify and protect important landscapes as well as “flagship” or “umbrella” species, covering large home ranges. This is where things start to go badly wrong. Though the marine realm is the largest repository of biodiversity, far larger than the terrestrial  landscape, we barely consider oceans worthy of conservation. All our efforts focus on the terrestrial world.

India is home to three of the world “biodiversity hotspots,” the Western Ghats-Sri Lanka region, the Himalayas and the Indo-Burma region. The Western Ghats are currently being ripped apart by large-scale legal and illegal mining, large development projects and even private hills stations like Lavasa. The hills have recently witnessed a very comprehensive conservation prioritisation and planning exercise by the Western Ghats Ecology Expert Panel (WGEEP), which  suggests an intelligent and democratic zonation plan with varying levels of exploitation. But most politicians object to the recommendations of the panel, arguably driven by kickbacks from the extractive industries or a short-sighted approach to “development.” Vast tracts of the Indo-Burma hotspot will be submerged by a series of dams, supposedly to cater to India’s ever expanding power needs. Next, is the species based approach. India’s two main flagship programmes — “Project Elephant” and “Project Tiger,” have been in place for a few decades now. Though their success is debated, they have been doing a reasonably good job of protecting these two species. But India Inc is now catching up with our charismatic beasts. Central India, globally recognised as one of India’s best metapopulation of tigers, is being carved up for coal mining. A proposal for an Elephant reserve in Chhattisgarh never saw the light of day since there is coal under the elephant forests. India’s Forest Advisory Committee (FAC) and the Minister of Environment and Forest (MoEF) have been fighting desperately to stop the indiscriminate industrial expansion into India’s natural forests. But both the FAC and MoEF were chastised for “slowing down India’s galloping economy.”

A 1,000-year-old Sal forest in Mahan was denied clearance for a coal plant because of the rich biodiversity and tiger presence. But with industrialists requesting the Prime Minister’s intervention, the clearance is now likely to go through. The needs of biodiversity conservation versus development must be carefully balanced. Especially for India where almost half the population has little access to electricity and lives below the poverty line. But frighteningly, there appears to be no balance. The scale rests firmly on the side of development. From Montek Singh Ahluwalia, to Manmohan Singh, to P. Chidambaram, there is a public proclamation that India’s “development” cannot be held up by the environment. There is no understanding of the CBD’s Aichi mission of “ sustaining a healthy planet and delivering benefits essential for all people .” The “National Investment Board”
(NIB) proposal, by which the government seeks to bypass laws and constitutional provisions, is an environmental disaster. Projects with large investments of above Rs.1,000 crore will be exempt from social and environmental clearances. This will be decided solely by the head of the NIB.

New Wetlands Economics Report (in Indian Context)

A major report that will help countries understand the economic value of inland wetlands, which cover a vast area of the earth’s land surface and provide key ecosystem services, was released at the conference of the Convention on Biological Diversity. The message ofthe report is simply, ‘drain it, lose it.’

Inland wetlands cover at least 9.5 million sq km of the earth’s surface, and together with coastal wetlands, 12.8 million sq km. Restoration  of this particular type of ecosystem is the most expensive. These water bodies provide clean water for drinking and agriculture, cooling water for the energy sector; they also regulate floods. Agriculture, fisheries and tourism sectors depend heavily on the health of wetlands. “In 100 years, we have managed to destroy about 50 per cent of the world’s wetlands, which is a stunning figure,” said Achim Steiner, Executive Director of the United Nations Environment Programme, at the release of the final consultation draft of the report titled “The Economics of Ecosystems and Biodiversity for Water and Wetlands” (TEEB for wetlands). The perception that wetlands are not essential to the functioning of societies and economies, contributes to their destruction. The TEEB report has been commissioned by the Ramsar Convention. India, a signatory to the Convention, has 25 wetlands listed under the covenant (such as Chilika) and about 150 identified wetlands of national importance. The country is being persuaded by international monitors to put in place management plans for the protected sites. Progress in this regard is “partial,” according to Ritesh Kumar, conservation programme manager of international NGO Wetlands International – South Asia.India’s challenge is to define wetlands on sound lines, and apply the rules it issued in 2010 for conservation and management of these water
bodies. Building activity in fast-expanding cities is draining wetlands, and many are also being filled with garbage. There is almost no conservation response from local and State governments, an activist said at the release of the report.

e-Atlas of marine bird areas launched

An e-Atlas of Marine-Important Bird Areas , was launched by the BirdLife International at the ongoing 11th Conference of the Parties (COP11) to the Convention on Biological Diversity (CBD). The inventory, covering 3000 Important Bird Areas (IBAs) worldwide, was described as a major contribution to marine conservation and a vital resource for meeting the CBD target of protecting 10% of marine and coastal areas by 2020. It will also be crucial to the process of describing Ecologically or Biologically Significant marine Areas (EBSAs) and will have significant input into the siting of offshore energy infrastructure, according to a note circulated at the COP11. The e-Atlas will be available exclusively online. Like Google Map, it will be dynamically updated as new sites are identified and new data about them become available. It will be linked to other BirdLife data  resources. Seabirds are now the most threatened group of birds. They present unique conservation problems, since many species travel thousands of kilometres across international waters . “Given the vast distances they cover, the long periods they spend at sea and the multiple threats they face there, identifying a network of priority sites for their conservation is vital to ensure their future survival,” said Ben Lascelles, BirdLife’s Global Marine IBA Coordinator.

Biodiversity Funding Talks in a Crucial Stage

Negotiators from over 190 countries sat late into the night on Thursday, trying to end the stalemate in funding talks as the Convention on Biological Diversity draws to a close. It is hoped that a combination of rising pressure from poor countries, and lowered expectations from India and the U.N. may help to wring some monetary support from richer countries to help protect the world’s vanishing plants, animals and natural habitats.

While progress was made on other fronts, especially on marine biodiversity, several decisions were being held hostage to the budget debate. Countries are not willing to commit themselves to further conservation measures until they are sure that the money will be available to carry them out. A group of developing countries — the G-77 and China — have drafted an internal statement, threatening to suspend the implementation of the Aichi Targets (global biodiversity conservation goals with a 2020 deadline) unless rich countries come forward with funding.

“A high-level U.N. expert panel had estimated an annual funding need of $130-$440 billion to meet Aichi targets. We are not expecting those kinds of resources, simply because negotiators have not come with that kind of
mandate at all. There is just no possible comparison between needs and commitments,” she said. “What we are expecting is a political commitment that there will be a structure on resource mobilisation in the CBD.” Rich nations want “robust baselines” — an assessment of needs and existing funding — as well as a solid reporting framework — to provide accountability for how the money will be spent, before they are willing to set any specific goals. Poorer nations proposed using data from the OECD — an organisation of all industrialised nations — itself as a baseline to determine interim funding, asking for a doubling of resources until the next conference scheduled for 2014.

Newsweek ends 80-year run, goes all-digital

Newsweek announced on Thursday that it would end an 80-year run as a print magazine at the end of the year, taking the venerable publication all-digital to cope with a harsh media environment. It will be available on the web and on tablets via a paid subscription, with “select content” available on The Daily Beast website. Like other U.S. magazines and newspapers, Newsweek has been grappling with a steep drop in print advertising revenue, steadily declining circulation and the migration of readers to free news online.

NTCA to create a national data base for tigers

The National Tiger Conservation Authority (NTCA) will soon create a national data base for tigers, the flagship species of India, and each one of the big cats will have a unique identification number and code. The UID will be one of the new initiatives of the NTCA taken up as part of better bio-monitoring of tigers. Experts say this will not only help in enhanced monitoring but give the exact estimate of the tiger population in the country. Camera trap will be used to photograph the tigers from both sides to avoid variation in stripes and a UID allotted to each of them. Another initiative being piloted in Corbett National Park is live electronic surveillance by providing cameras with video recording facility on towers that will help in tracking the movement of animals, human interference and checking poaching, he said.

“E-eye” project encompassing short range  infra-red night vision and long range thermal camera stations, remotely operated cameras and wi-max devices, will enable sounding of alerts not only at the local park level but to the NTCA headquarters whenever there is destructive activity. This will apart from the Monitoring System for Tigers Intensive Patrolling and Ecological Status (MSTriPes), the software developed by the Wildlife Institute of India (WII), to boost tiger conservation efforts through patrolling intensity and spatial coverage.

Aadhaar-enabled service delivery system launched

The Union Government launched a new Aadhaar-enabled service delivery system here on Saturday with a promise of eliminating fraud, black-marketing, pilferage in schemes and bribery through a reliable mechanism of direct cash transfer to beneficiaries in a transparent manner. Prime Minister Manmohan Singh and United Progressive Alliance chairperson Sonia Gandhi inaugurated the ambitious programme which seeks to integrate the government-run flagship schemes with the Aadhaar card system at a public meeting in this small town near Jaipur. The launch marked second anniversary of the Unique Identification Citizenship Number Project. In addition to getting the benefit of the social sector schemes promoting financial inclusion, those holding the Aadhaar card with a 12-digit number can offer proof of identity and address anywhere in the country. The Mahatma Gandhi National Rural Employment Guarantee Act’s wages and pensions and scholarships will be paid though the card after the integration, even as the UID is already an online identity platform used for authenticating beneficiaries.

India’s tuberculosis challenge

Tuberculosis was declared a global health emergency in 1993, but it has been growing unchecked. Today, TB is causing millions of deaths every year globally. Like any infectious disease, TB is prevalent even in developed
countries. But it is a more serious problem in the developing and populous countries. India and China together account for nearly 40 per cent of the global burden. The World Health Organisation’s Global Tuberculosis Report 2012 reveals the magnitude in the two countries, and why India has the most number of patients . In India, the prevalence is 3.1 million at best and 4.3 million at high. In China, the figures are 1.4 million and 1.6 million respectively. Even in prevalence rate (per one lakh population a year), India is 249 at best and 346 at high. China fares better: 104 at best and 119 at high. In 2011, India again topped the list for incidence (the number of new cases detected in a year). It had 2 million to 2.5 million, compared with China’s 0.9 million to 1.1 million. If global incidence during 2011 was 8.3 million to 9 million, “India and China accounted for 26 per cent and 12 per cent respectively,” the WHO report notes. Mortality is also high in India. About three lakh people will die this year. There are other differences between China and India. The percentage of TB patients who are also HIV positive is 6.5 in India; China’s figure is 2.3 per cent. This could be because only 23 per cent of TB patients were tested for HIV in China compared with India’s 45 per cent. There is a significant, but apparent, reduction in prevalence and mortality when compared with 1990 levels. Increases in treatment success percentages have been registered for new cases — from 25 per cent in 1995 to 88 per cent in 2010.

According to the WHO report, the detection rate for new and relapse cases is almost the same in 1995 and 2011 — 58 in 1995 and 59 in 2011. But it was 71 per cent in 2011 among new sputum positive (NSP) patients alone, notes a May 2012 paper in the Indian Journal of Medical Research .”TB case-finding has stalled”. The government has woken up. After it took some dramatic and bold initiatives over the last one year, TB detection and management is no longer the same. In June 2012, the government banned serological tests. There are plans to go out and test certain target groups. But the landmark decision was making TB a notifiable disease. This has made it mandatory for laboratories, hospitals, nursing homes and doctors, both in the public and private sector, to report every TB case detected. The government system would kick in once a case is notified to ensure
correct diagnosis and complete adherence to treatment during the entire duration of treatment. Two important panels have made recommendations to engage the private sector in multiple ways to rein in TB.

This is where the approaches that India and China adopted to fighting TB diverged. Of the 37 notifiable diseases in China, TB ranks No. 1. It pulled out all the stops by 2000. “The concept of acceptance of the problem, identifying its requirement and the political will of TB eradication has set China on a progressive path,” notes a paper published in the journal Interdisciplinary Perspectives on Infectious Diseases.

Outcomes of Convention of Biological Diversity (Hyderabad)

The strongest message to emerge from the global conference of the Convention on Biological Diversity in Hyderabad is that countries allowing their natural capital to be rapidly depleted and destroyed in pursuit of short-term goals are dangerously risking their future. Many examples from around the world underscore the importance of diverse plant and animal species to agriculture, human health, climate and the complex web of interactions that make up an ecosystem. It is important to note, for example, that the latest update of the IUCN Red List of Threatened Species classifies 20,219 of the 65,518 species listed, as facing extinction. Given the rising threat, the Conference of the Parties to the CBD have done well to commit themselves to a doubling of biodiversity funding for developing countries, although from a modest baseline. India, which has assumed the presidency of the conference and is itself biodiversity-rich, must show leadership by mainstreaming ecosystem concerns in development policy. It has won plaudits by allocating $50 million towards building technical and human capacity to attain biodiversity conservation goals in the country. But the real test lies in its commitment towards strengthening and implementing national laws on environment protection, forests, wetlands, marine  areas, wildlife, tribal welfare, air quality and urban development. Some key laws, notably the Environment (Protection) Act, are weakly enforced at present, if at all. State governments share a considerable part of the blame for rendering the law sterile. Arguably, some of the most important takeaways for participants of the Hyderabad meet come from the findings of The Economics of Ecosystems and Biodiversity studies. They show that nature is critically important to the livelihood of millions, and in India, 47 per cent of the ‘GDP of the Poor’ comes from ecosystem services. It is heartening that Prime Minister Manmohan Singh acknowledged this contribution of natural capital to the economy of the less affluent — in comparison with conventional GDP measurements. There are valuable insights also for urban areas in the ‘Cities and Biodiversity Outlook’ study. A preliminary assessment of Bangalore, for instance, has demonstrated the value of biodiversity to slum livelihoods, in the form of food and herbal medicines. Local body governments, however, were found to have insufficient knowledge on sustainable development. These are pointers to the work that lies ahead. The CBD’s Strategic Plan for Biodiversity and its Aichi Targets for 2020 call for speedy action to stem losses. India must lead by example over the next two years.

Lost childhood

The alarmingly high prevalence of child marriages in India became known globally when  International Day of the Girl Child was celebrated for the first time on October 11. According to UNICEF, girl child marriages in India stood at 43 per cent in 2007-2008; it was 54 per cent in 1992- 1993. A recent report of the United National Population Fund (UNPFA) also underlines the magnitude of the problem. Forty-seven per cent of women between the ages 20 to 24 were married before they turned 18 during the period 2000-2011, it stated. In 2006 alone, 11 States had 40 to 61 per cent of women in the 20-24 age group who were married by age 18. No wonder that India accounts for over 40 per cent of the world’s child marriages. Three consecutive household surveys (1992-1993, 1999 and 2005-2006) show the rate of child marriage among girls below 15 years had fallen from 26 per cent in 1992-1993 to 18 per cent in 2005-2006, an overall drop of 30 per cent. The corresponding rate of reduction during the same time period in girls below 18 years was only 12.5 per cent. While this drop, for girls below 15 years, provides some reason to cheer, it is “still not sufficient to guarantee children their full rights,” UNFPA notes. The slow pace of decline is frustrating as the spectre of child marriage manifests itself in multiple ways — the abrupt termination of education and life-threatening health problems. A body of evidence indicates that teenage girls are less aware of contraceptives, very often do not have access to them and lack the bargaining power to use them. Thus they end up with unwanted pregnancies at a very early stage. Complications from pregnancy and childbirth are the prime cause of death in teenage mothers and their babies in low- and middle-income countries. Lack of education, rural settings and poor economic status are some of the key determinants of teenage wedlock. The UNFPA report indicates that girls from rural areas in India were twice more likely to be married than urban girls. Those with nil education were thrice more likely to become victims compared to those with secondary or higher education. While minor girls from the poorest families had a 75 per cent possibility of being married, 16 per cent from the richest households ended up the same way. Aside from poverty and lack of education, social norms and perceptions are important factors too. Hence the approach to deal with the two strata should have many commonalities and yet be different. Providing education, creating awareness and offering incentives linked to delayed marriages are more important for the lower strata. Changing social perceptions should be the priority in the case of rich parents.

First test of Rajoy regime’s austerity policies in Spain

Two northern regions in Spain were holding elections for their legislatures on Sunday in the first popular test of the central government’s stringent austerity policies since it came to power late last year. A deepening financial crisis and how best to address the nation’s separatist tensions were the main issues facing political leaders and voters in the turbulent Basque region and in northwestern Galicia. With 2.7 million voters, Galicia is a traditional stronghold of the ruling Popular Party and the homeland of Prime Minister Mariano Rajoy, so an upset there would rock the PP regionally and nationally. Spain is in its second recession in three years and has near 25 per cent unemployment.

The government’s austerity measures have led to protests across the country, some of which have ended in clashes between demonstrators and police. The financial crisis has also brought to the fore calls from some of Spain’s 17 semiautonomous regions for greater independence. Spain has separatist groups in Galicia, the Basque region and prosperous and influential Catalonia.

About 1.8 million Basque voters were likely to oust Socialist leader Patxi Lopez, who ruled thanks to an agreement with the PP from the 75- seat legislature. The Basque region has been wracked by decades of separatist violence. Mr. Lopez was jostled by demonstrators carrying placards backing violent Basque separatist group ETA as he voted early on Sunday. ETA, which stands for Basque Homeland and Freedom, is classified as a terrorist group by the European Union, the United States and Spain. It was decimated by arrests over recent years and announced a definitive cease-fire last year but Spain insists it must lay down its arms and dissolve.

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