Thursday, 31 December 2015

UK Floods: What have we done to make the flooding worse?


By Camila Ruz and Jon Kelly in BBC News Magazine


Image copyrightGetty Images


Floods have caused havoc across much of the UK. Have decisions made by the public and politicians alike made things worse?

Thousands of homes are without power after Storm Frank as people brace themselves for more flooding.

Dozens of flood warnings remain in place with north-east Scotland at risk of heavy rainfall on Sunday and Monday.

Here are some of the things that it has been suggested have contributed to the problem.


Building on flood plains

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Some four million residential properties in England currently sit on places with a one in 1,000 risk of flooding each year.

After floods in 2007 that affected 55,000 homes, the government commissioned a review chaired by Sir Michael Pitt to ensure it didn't happen again. The review said it wasn't possible to prevent all building on floodplains but recommended that there should be a strong presumption against it. It also said buildings should avoid creating flood problems for themselves or their neighbours.

But large-scale building on floodplains has continued. In fact, according to the Committee on Climate Change (CCC), housing in areas where flooding is likely has grown at a rate of 1.2% per year since 2011, while the building of residential properties in areas of low risk has risen by just 0.7% over the same period.

Policy-makers are often keen to see brownfield land used for residential development, but these areas are often most vulnerable to flooding. Demand from buyers has fuelled this growth, too.

You might assume that there would be huge drops in property prices after highly publicised floods. But in places like Tewkesbury, Gloucestershire, and Cockermouth, Cumbria, which experienced heavy flooding in 2007 and 2009 respectively, prices have remained largely unaffected in the long run.


Dredging

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The argument over dredging has been going strong since floods in Somerset in 2013-14. At the time, farmers claimed that lack of river dredging had been making the problem worse. "Somerset is suffering from the impacts of two decades of underinvestment with the cessation of dredging along the lowland rivers Parrett and Tone," said the National Farmers Union in their Flooding Manifesto.

Dredging removes the silt that builds up at the bottom of rivers and deepens the channel. Some people say that it helps prevent flooding by making the water flow faster and more efficiently. Supporters of dredging have complained that the European Water Framework Directive prevents it being carried out.




But others have argued that it's not a good idea because the river can still be overwhelmed. When this happens it can cause faster and more dangerous floods downstream. "We've tended to straighten rivers, to canalise them, to embank them and all that rushes the water down to the nearby urban pinch point," explains environmentalist and writer George Monbiot, adding that the flow of water should be slowed down and the rivers lengthened instead.


River straightening

Image copyrightiStock

One way of encouraging a river to take its time in getting to its destination - and therefore reduce the risk of flooding - is to allow it to make large bends called meanders or to braid itself into a network of smaller channels. These twists and turns can help prevent flash floods from racing their way down at full force.

"There still has to be somewhere for that rain to go, you are not going to be able to hold it all back in the hills," explains Monbiot.

Reconnecting a river with its flood plain can also help prevent extreme events downstream. This allows the river to flood in certain areas, storing water in fields until it can be released slowly once the danger has passed. But this has to be controlled.

"If it's not managed carefully, obviously that flooding can have a serious impact on the farming business," says Rob Howells, the NFU's Water Quality Adviser. "The protection of the urban area has to be planned in conjunction with the protection of rural areas to make sure that everything is joined up and to make sure that you are not having unintended consequences elsewhere," he adds.


Destruction of upland habitats

Image copyrightScience Photo Library

Trees can act as a natural flood defence. They have roots that reach deep into the soil, loosening it and allowing water to drain down more easily. A hillside covered in thick vegetation tends to release water more slowly than a bare hill. The compacted soil of farmland can also make the problem worse by reducing the ground's ability to hold water.

This is especially important upstream. Planting woodlands at a stream's upper reaches could help delay the water from reaching the main river. Trees can also end up providing small dams, although this needs to be managed with care.

Beavers would do this work for free, adds Monbiot. "They could be a very useful tool in preventing floods."

The Environment Agency has said that large areas of trees would need to be replanted for them to really make a difference. Flood defences on farmlands upstream might also not have had much effect in preventing the current flooding. "The levels of rainfall in the North West on already saturated ground were unprecedented," says a spokesman from the Department for the Environment, Food and Rural Affairs (Defra). "It is unlikely flood protection on farmland would have made a material difference in such an exceptional flood."

Blanket bogs also play a key role in soaking up rainfall upstream. The peaty soil of a bog can be up to 90% water. Sphagnum mosses growing there can also hold water like a sponge. But many blanket bogs have been drained and their peat cut out which can increase the risk of flooding downstream.

Some people argue that there is not much incentive for farmers to keep land covered in thick vegetation because of EU rules. Land covered with "permanent ineligible features" such as ponds, dense scrub and some woodland can be disqualified from farm subsidies.

Woodland cover has increased in the UK since its lowest point during World War One but the UK is still one of the least wooded countries in Europe. "Planting trees can help to slow the flow of rivers and has an important role to play in reducing flood risk but they need to be located carefully to make sure that they are actually being beneficial," adds Howells.


Flood defences

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Critics have focused on the effectiveness of existing barriers. Carlisle's £38m flood-defence scheme was breached despite having been constructed only five years before, with an additional half-metre (1ft 8in) added on top to allow for the effects of climate change. There was anger at the decision to lift York's Foss Barrier, a key part of the city's flood defence system, because its pumps were at risk of electrical failure.

During its first year in office, the Conservative-Liberal Democrat coalition announced it was cutting spending on flood defences by 8% compared with previous yearly spend - though the Environment Agency said at the time that the budget had actually been reduced by 27% in cash terms.




Critics have said reductions in maintenance budgets have worsened the problem. Judith Blake, the leader of Leeds City Council said there was a "north-south divide" in efforts to prevent flooding. She said the north of England had not seen "anywhere near the support that we saw going into Somerset", which flooded in 2014, and pointed out that the government had cut funding for a flood defence project in Leeds in 2011. She said there was now a "real anger growing across the North".

However, the prime minister said the government had spent more per head of the population on flood defences in the north than in the south and that £2.3bn would be spent on flood defences by 2020. The government has ordered a major review of flood prevention strategy.

A Defra spokeswoman said £1.7bn of investment into new or expanded flood defences in the previous parliament was an increase on spending from the previous administration. The spokeswoman added that a new six-year spending programme - replacing an annual bidding process for flood defence schemes - has allowed the government to make a long term commitment to protect the £171m spent each year on maintaining defences in real terms.

The concentration of Britons in urban areas - 82% live in towns and cities - has made them especially vulnerable to flooding because concrete surfaces, unlike soil, are almost completely impenetrable to water.

And even when new flood defences are built to protect homes in one area, there are complaints that they often simply cause flooding elsewhere. When the Berkshire town of Wraysbury flooded in 2014, residents said they were being used as "sacrificial lambs" to prevent Maidenhead from being flooded.
Climate change

Cameron has made a link between the floods and climate change. The government anticipates trends which have seen drier summers and wetter winters in the UK to continue. The UK Climate Projections of 2009 estimated a sea-level rise of between 13cm and 76cm for the UK by 2095.

The prime minister has said climate change is one of the biggest challenges the country faces and the government has announced plans for the UK's coal plants to be phased out within 10 years. The Environment Secretary recently announced a National Flood Resilience Review that would look again at flood risk, including the future impact of climate change.

Labour have said climate change should be treated as a national security issue and urged the government to do more. Environmental campaigners have criticisedministers for cutting support for green energy sources.

The climate change summit in Paris agreed a deal to attempt to limit the rise in global temperatures to less than 2C. However, Monbiot says "we have to take urgent action on climate change and go a lot further than the Paris agreement proposed".

The collapse in the price of oil is a challenge to the old world order

Allister Heath in The Telegraph


It is one of life’s mysteries that being wrong about everything has never been much of a barrier to success. Take Thomas Malthus, the British theologian: his big idea was that the number of human beings would necessarily grow faster than the supply of food, leading to calamity. There was little difference, in his mind, between people and rabbits: both were doomed to over-breed, over-consume and starve.

Yet this theory, expounded in 1798 in An Essay on the Principle of Population, one of the most influential books ever written, and now also routinely applied to oil and other resources, is bogus. Unlike rabbits, who are powerless to control their environment, the more we need, the more we eventually find a way of producing: the availability of food and oil are determined by technology and economics, not by some law of nature. Modern techniques (such as fertilisers, genetic selection or fracking) mean that agriculture and the extraction of commodities have become hugely more efficient.

The average British field yielded just over three tons of cereal per hectare per year in 1961; today, it is twice that. Thanks to the spread of free markets and knowledge, the world has never produced so much food, and the number of hungry people worldwide has dropped by 216m since the early Nineties, according to the United Nations.

Ditto oil production: in 2000, the Energy Information Administration estimated that the world contained just over one trillion barrels of untapped oil; since then, proved reserves have shot up by 60pc, increasing every single year despite booming consumption from energy-thirsty emerging markets.

Malthus wasn’t just far too pessimistic about supply: he was also wrong about demand. Rabbits can’t control their birthrates; we can. As more countries embrace markets and globalisation, thus ensuring that their economies develop, global birth rates keep on falling. As to energy consumption, it is just a matter of time before improved battery technology and ever-cheaper solar power finally lessen our dependence on the internal combustion engine and oil. We will eventually be able to feed and fuel the world’s population using significantly less land and fewer hydrocarbons than we do today.

Jesse H Ausubel, an academic at the Rockefeller University in New York, has calculated that an area the size of the Amazonian forest could be returned to wildlife when the average farmer around the world becomes as productive as their US counterparts. Ausubel calls this the Great Reversal: nature’s chance to restore land and sea to their original use. It is an intriguing and exhilarating prospect, made possible by the wonders of capitalism, innovation and human ingenuity.



The abject failure of Malthusianism was, in fact, one of the defining trends of 2015, especially in the oil market; it will continue to be one of the central forces of 2016, impacting everything from how quickly the Bank of England puts up interest rates, to the stability of the Middle East. The price of Brent crude oil, which briefly reached $147 a barrel in 2008, is now down to around $37. Some analysts even believe it could fall briefly to $20, especially if more Iranian supplies than expected hit the global markets.

There are many reasons for this historic collapse. Thanks to shale, America is poised to become a net oil exporter. Opec, the old cartel that wreaked so much havoc in the Seventies, is now all but defunct; its members no longer have the ability to push up oil prices. At the same time, the slowdown in China has reduced demand for energy.

The cost to oil-exporting countries from the lower prices is nearing $2 trillion a year. Drivers, by contrast, have saved a fortune, allowing them to spend the cash on other things and contributing to a strengthening in consumer spending across the Western economies.

Drivers have saved a fortune thanks to low petrol prices

Manufacturers’ costs have also slumped, facilitating investment and creating jobs. Europe, China and India have been the great winners. In Britain, lower petrol prices have helped eliminate consumer price inflation. Take-home pay has thus shot up after years of austerity. Cheap oil has also delayed – and delayed again – the prospect of a rate hike from the Bank of England, helping borrowers but hurting savers, some of whom had already lost out from their holdings in commodity and oil firms.

Perhaps the biggest impact will be geopolitical. In oil-exporting Venezuela, the public has booted out the Corbynite government whose demented Left-wing policies had led to a shortage of toilet paper. In Russia, the budget deficit is likely to reach alarming levels this year, forcing the country to dip into its reserves and putting pressure on President Putin, especially given his military commitments in Syria.

The Gulf states face the greatest challenge to their viability. Some, such as the UAE, a close ally of the West’s fight against terror, have such large cash reserves that they ought to be able to cope with low oil prices for decades. Others, including Iraq and Bahrain, will find it much tougher; Saudi Arabia has just been forced to pass an emergency budget. All will slash their purchases of Western assets and luxury goods, hitting the London economy.



The West will be hoping that the existing Gulf regimes aren’t replaced by something worse, while also hoping that the collapse in the price of oil will reduce flows of cash to extremist Wahhabi and Salafist groups around the world. If radical Islamist terror groups end up being the biggest losers, the collapse in the oil price could yet end up achieving more than sanctions or Western military intervention ever could; but a successful uprising in somewhere like Saudi could also risk turning a bad situation into a catastrophe.

As for Scotland, the nationalist electorate will eventually have to wake up to the new reality of a world awash with oil. The SNP’s plans for independence didn’t even come close to adding up even when the price of Brent crude was over $100 last year.

At current prices and with output sliding, an independent Scotland that sought to retain the NHS and the welfare state would face immediate bankruptcy.

Forget about politics and slick campaigns: if anything keeps the UK together over the next few years, it will be cheap oil and the latest, abject failure of Malthusianism, one of the most wrong-headed ideologies of the past 200 years.

What's the next generation of batsmen learning?

Ian Chappell in Cricinfo


It's now eight years since Misbah-ul-Haq's ill-conceived attempted scoop shot ballooned to short fine leg at the Wanderers Stadium and India were crowned inaugural World T20 champions.

Much has happened in cricket since that exciting five-run victory and the bulk of it revolves around the evolution of T20. Leagues have sprung up like daisies in summer, with the IPL being the most affluent and gaudy, whilst the other two versions of the game - Test and 50-over cricket - have receded into the shadows.

Now that kids from all over the world who watched that Wanderers final are at an age where they could make their own name in the game, it's time to look at how young players are being developed.

The dilemma involving the development of young cricketers is simple. For batsmen, it's: do you concentrate on a method that provides hitting power and the capability of scoring at ten runs per over, or do you develop a solid foundation that allows for adjustment to any form of the game?

For a bowler it's even more straightforward: do you implant in his mind a metronomic desire to produce a string of dot balls, or a mentality that stresses the priority of wickets?

Having just witnessed a 40-year-old Michael Hussey shred a Big Bash League attack with a mixture of scorching off-drives, gentle taps to initiate a scampered single and four power-laden shots that cleared the boundary, I'd opt for the solid foundation method.

Hussey, along with a number of other fine batsmen from an era when players were brought up with success in the longer forms of the game as a measuring stick, is proof a solid all-round technique is easily adaptable to T20 cricket. The best T20 teams have a combination of batsmen who can survive and prosper against good bowling and those who regularly clear the boundary rope.

The ideal fast bowling blueprint is Dale Steyn, a bowler who combines an excellent strike rate with a relatively low economy rate. For spinners, R Ashwin is a good role model; he takes wickets at both ends of the batting order and keeps the long balls to a minimum.
The secret to good bowling is to keep believing you can dismiss a batsman. Once that thought turns to purely containment, the batsman is winning the battle.

Given reasonable pitches, the bowlers adapt well, but many batsmen struggle in anything other than serene conditions. On the evidence of the eye test and the average length of a Test, it's obvious that solid foundations are crumbling and most batsmen are ill-equipped to survive a searching test by a good bowler. This has been a recent trend but I don't see any attempt to alter the way batsmen are being developed.

I suspect batsmen are being over-coached and bombarded with theories in structured net sessions that often involve the dreaded bowling machine. There's a lot to be said for the old-fashioned method of simply advocating a solid defence and then encouraging a youngster to spend hours playing in match situations - either in the backyard or at the local park - in order to learn how his own game works best.

This method worked extremely well for batsmen as successful and diverse in style as Sir Garfield Sobers, Sachin Tendulkar and Greg Chappell. As Sobers says in his excellent coaching book: "One of the tragedies of cricket coaching is the greatness of the game's best players is revered but never followed."
It would be a good start for a budding young batsman to emulate the style and development process of a Tendulkar, a Hussey or an AB de Villiers. It would also help if the youngster avoided listening to coaches with theories on batting that haven't been proven in the middle. As former great Australian legspinner Bill O'Reilly once stated: "If you see a coach coming, son, run and hide behind a tree."
I'd modify that for a young batsman and say: "Seek good coaching or else avoid it at all costs and learn the game for yourself."

Her body is a brewery: Woman whose body turns food into alcohol beats drink-drive charge

The woman from New York state suffers from ‘auto-brewery syndrome’ but blew four times over the limit despite claiming that she ‘never felt tipsy’


 
In tests by doctors, the woman blew well over the legal limit even though she had not had any alcohol, her lawyer said. Photograph: Jack Sullivan / Alamy/Alamy


Associated Press in The Guardian


Drunken-driving charges against a woman in upstate New York have been dismissed based on an unusual defence: her body is a brewery.

The woman was arrested while driving with a blood-alcohol level more than four times the legal limit. She then discovered she has a rare condition called “auto-brewery syndrome”, in which her digestive system converts ordinary food into alcohol, her lawyer Joseph Marusak said.

A town judge in the Buffalo suburb of Hamburg dismissed the charges after Marusak presented research by a doctor showing the woman had the previously undiagnosed condition in which high levels of yeast in her intestines fermented high-carbohydrate foods into alcohol.

The rare condition, also known as gut fermentation syndrome, was first documented in the 1970s in Japan, and both medical and legal experts in the US say it is being raised more frequently in drunken-driving cases as it is becomes more known.

“At first glance, it seems like a get-out-of-jail-free card,” said Jonathan Turley, a law professor at George Washington University. “But it’s not that easy. Courts tend to be sceptical of such claims. You have to be able to document the syndrome through recognised testing.”

The condition was first documented in the US by Barbara Cordell of Panola College in Texas, who published a case study in 2013 of a 61-year-old man who had been experiencing episodes of debilitating drunkenness without drinking liquor.

Marusak contacted Cordell for help with his client who insisted she had not had more than three drinks in the six hours before she was pulled over for erratic driving 11 October 2014. The woman was charged with driving while intoxicated when a breath test showed her blood-alcohol content to be 0.33%.

Cordell referred Marusak to Dr Anup Kanodia of Columbus, Ohio, who eventually diagnosed the woman with auto-brewery syndrome and prescribed a low-carbohydrate diet that brought the situation under control. Her case was dismissed on 9 December, leaving her free to drive without restrictions.

During the long wait for an appointment, Marusak arranged to have two nurses and a physician’s assistant monitor his client for a day to document she drank no alcohol, and to take several blood samples for testing.

“At the end of the day, she had a blood-alcohol content of 0.36% without drinking any alcoholic beverages,” Marusak said. He said the woman, who cannot be named for reasons of medical confidentiality, also bought a breath test kit and blew into it every night for 18 days, registering around 0.20% every time.

The legal threshold for drunkenness in New York is 0.08%.

While people in cases described by Cordell sought help because they felt drunk and did not know why, Marusak said that was not true of his client. “She had no idea she had this condition. Never felt tipsy. Nothing,” he said.

Wednesday, 30 December 2015

Recession, retrenchment, revolution? Impact of low crude prices on oil powers

Guardian writers:  in Moscow  in New York in Lagos  in Tunis  in Caracas  in Cairo and 

A glut of oil, the demise of Opec and weakening global demand combined to make 2015 the year of crashing oil prices. The cost of crude fell to levels not seen for 11 years – and the decline may have further to go.

There have been four sharp increases in the price of oil in the past four decades – in 1973, 1979, 1990 and 2008 – and each has led to a global recession. By that measure, a lower oil price should be positive for the world economy, with lower fuel costs for consumers and businesses in those countries that import crude outweighing the losses to producing nations.

But the evidence since oil prices started falling from their peak of $115 a barrel in August 2014 has not supported that thesis – or not yet. Oil producers have certainly felt the impact of the lower prices on their growth rates, their trade figures and their public finances but there has been no surge in consumer spending or business investment elsewhere.

Economist still reckon there will be a boost from a lower oil price particularly if it looks as if the lower cost of crude will be sustained.

Dhaval Joshi, an economist at BCA, a London-based research company, said: “A commodity bubble has deflated three times in the past 100 years: the first was after world war one; the second was after the 1980s oil shock; the third is happening right now.”

For the big producer countries, this is a major headache, the ramifications of which are only starting to be felt. Oil powers base their spending plans on an assumed crude price. The graphic below shows just how far below water their budgets are.

Joshi says crude prices may fall by a further 35% to reach its long-term trend. That would mean an oil price closer to $25 a barrel - and fiscal crises in some of the world’s most pivotal economies.

Saudi Arabia


The Ras Tanura oil production plant in Saudi Arabia’s eastern province. Photograph: Bilal Qabalan/AFP/Getty Images

Low oil prices are not just squeezing Saudi Arabia’s domestic budget, imposing austerity on a kingdom not used to it: it is taking its toll on Saudi support for foreign projects too.

The kingdom this week announced swingeing budget cuts for 2016 to address an alarming deficit of 15% of GDP run up this year. Subsidies for water, electricity and petroleum products are likely to be cut, and government projects reined in.

But overseas beneficiaries will face some austerity too. For years, Saudi Arabia has used its oil wealth to support friends and allies around the world, including media organisations, thinktanks, academic institutions, religious schools and charities. Countries that have traditionally benefited from Saudi largesse include Jordan, Lebanon, Bahrain, Palestine and Egypt.

But now the IMF has raised the prospect that Saudi Arabia could go bankrupt in five years without changes to its economic policy, cuts in support to foreign allies seem inevitable.

Egypt’s black-hole economy is potentially the kingdom’s most expensive foreign policy commitment. In recent years, Saudi Arabia has donated billions in cash and oil products but, despite this, the Egyptian economy, battered by war, terrorism and political instability, is facing an acute foreign currency shortage.

Speculation is mounting that Saudi financial support to Egypt is starting to dry up – something the Egyptian authorities have denied – and that this is damaging the bilateral relationship.

There have been some signs of tension. In July, Egypt’s oil minister said he had no objections to importing crude oil from Iran, a move sure to ruffle the Saudis. In September, the Saudi journalist Jamal Khashoggi – known for his closeness to the Saudi state – raised eyebrows when he said the new Egyptian culture minister, Hilmi al-Namnam, who is well known for his secularism and dislike of Wahhabi Islam, should never have been appointed.

So far, the Saudi authorities have given few clear signs about how they are planning to respond to the oil price crisis, let alone lay out a long-term plan for a post-oil Saudi Arabia.

Options under consideration are thought to include cutting construction projects, energy subsidies and public sector wages, introducing new taxes and privatisations, and issuing debt.

Another possibility foreign observers have posited is that the Saudis will be forced to unpeg the riyal from the dollar, although given the potential this would have for uncontrollable knock-on effects on the rest of the economy, this seems likely to be a last resort.

Cuts impacting on ordinary Saudis are something the government will be keen to avoid to maintain political stability, so industry, the public sector and foreign allies are likely to bear the brunt of the economic burden.




Nigeria


 Nigeria’s president, Muhammadu Buhari, swears in his cabinet in November. Photograph: Afolabi Sotunde/Reuters

The oil price slump has not prevented Nigeria’s new government from unveiling big spending plans – but analysts warn that the generosity is misplaced at a time when oil prices languish below $40 a barrel. 

Nigeria is Africa’s top oil producer and the World Bank estimates crude sales fund about 75% of the country’s budget.

In its £19.8bn budget proposal, the government plans to increase spending by about one quarter over last year’s budget, and to pay for it by improving tax collection and cutting the cost of government.

The budget includes £1.65bn for cash transfers to poor Nigerians. The programme was a campaign promise of the president, Muhammadu Buhari, who was elected in March on a platform of cutting corruption and weaning Nigeria’s economy off its dependence on oil revenue.

But some analysts think the proposed budget is unrealistic during times of $40 oil.

“This brings a dose of reality to a people who have extremely high expectations,” said Bismarck Rewane, the chief executive of Financial Derivatives Co. He predicted the government would have to back down on some of its promises.

Nigeria is Africa’s largest economy, but most of the money is concentrated in the hands of a wealthy elite and about two-thirds of Nigerians live in poverty, according to the United Nations development programme.

Analysis Nigeria overtakes South Africa to become Africa's largest economy. Complicated statistical recalculation adds $240bn to the economy - the equivalent of finding six Ghanas within Nigeria, says Tolu Ogunlesi

Unemployment has climbed this year, hitting 9.9% in the third quarter, according to the National Bureau of Statistics.

Chuba Ezekwesili, research analyst at Nigerian Economic Summit Group, says despite the falling price of crude, the country has been able to avoid a jump in inflation by imposing limits on the availability of foreign currency.

While other major oil producing economies have let their currencies lose value along with oil prices, Nigeria has spent its reserves to prop up the value of the naira. But Ezekwesili says they can only do that for so long.

“They’re sort of delaying the inevitable,” he said. “I feel like eventually it has to give way, and by the time it does I feel the economy is going to be hurt because a lot of businesses can’t work under those conditions.”

Ezekwesili was also sceptical of the government’s ability to generate the revenue necessary to pay for programmes such as cash transfers to the poor. He doubts the government can accomplish its goals of streamlining its costs and generating more revenue by next year.

“One thing I’ve learned about policies in Nigeria is we tend to be very optimistic but it never really works out exactly as we want it to,” Ezekwesili said.

Russia


Oil extraction at a Gazprom field in Khanty-Mansiysk, Russia. Photograph: TASS/Barcroft Media

Vladimir Putin goes into 2016 with record approval ratings but the shakiest economic outlook since he took charge. In the 15 years he has been at the helm, 2015 was the first year that real wages registered a decline, something that did not happen even during the 2008-09 financial crisis.

Oil and gas exports make up about half of the Russian budget, and the rouble rate has been strongly linked to the price of oil.


Sanctions against Russia, particularly the ban on Russian banks seeking western credit, combined with falling oil prices in late 2014 to create a perfect storm that demolished the rouble, with the currency losing half of its value against the dollar, reviving memories of previous crashes. The currency regained some of its value by spring, but falling oil prices in autumn have caused it to fall back to lows similar to those it experienced in late 2014.



Rouble in freefall despite rate hike



Falling oil prices were one of the principal reasons for the collapse in the Soviet economy, and some economists are warning of history repeating itself. Riding on a wave of high oil prices for most of his presidency, the Russian president did not expect such a sharp downturn. Last October, Putin said that if the price of oil fell below $80 a barrel, the world economy would crash. A range of other top Russian officials made similar statements, in effect ruling out the possibility that oil could fall below $70.

Some analysts say the rouble is still overvalued, and the current oil price should theoretically push the rouble down further. This is necessary to balance the budget: the fewer dollars Russia receives for the oil it sells, the higher the exchange rate needs to be for the budget to receive the requisite amount of roubles. For the budget to balance at 65 roubles, not far off the current rate, the price of oil should be $70, a recent Bank of America Merrill Lynch report found.

For ordinary Russians, it could be a tough year ahead. Those who were used to travelling abroad have already had to scale back as the rouble made the cost of visiting foreign cities prohibitive; and rising food prices have made it harder to balance the books for many families.

The 2016 budget, fixed in October, requires oil to be at $50 in order to run a 3% deficit within “acceptable” rouble rate limits, meaning if the price does not rise soon, cuts will need to be made or reserves spent. The war in Syria is an extra cost, and the announced increases in military spending are not likely to be reversed.


US


Belridge, California, is one of the oldest and largest oilfields in the US containing tens of thousands of wells, many of which are being fracked. Photograph: Les Stone/Corbis

Filling up at the gas station hasn’t been this cheap in the US since the recession. The nationwide average price of a gallon of regular is now $2.02 (£1.36), down 58 cents from this time last year, according to auto club AAA, and expected to fall further.

Scared that North America’s oil boom threatens its grip, Opec, the oil cartel, stepped up production and forced a price war that has driven oil prices down to below $35 a barrel. US consumers have benefited from lower petrol prices to the tune of about $700 a year, according to the US government, and that money is fuelling consumer spending. According to a recent report from JP Morgan, 80% of that saving is being spent on goods and services.

But the collapsing price of oil has also cast a shadow over the US energy industry – formerly one of the country’s fastest growing employers. Fracking – the controversial process of extracting oil and gas from shale rock – has become less attractive to investors as the oil price has fallen, and tens of thousands of jobs have been lost as a result. This year, the International Energy Agency said low oil prices would “slam the brakes” on the US shale industry and the impact is already being felt across the country’s oil producing areas.

The US energy sector has cut more than 90,000 jobs this year, according to outplacement company Challenger, Gray & Christmas. And while the overall US unemployment rate has continued to fall, in Texas unemployment has risen since August, according to the Bureau of Labour Statistics. In North Dakota, home of the Bakken shale oil field, more than 17% of the mining jobs – which include oil and natural gas – have disappeared in the past year. More jobs look certain to be lost in the coming months.

North of the border in Canada, things are even worse. In Alberta, “the Texas of the north”, job layoffs and the downturn of the economy have been blamed for a 30% rise in suicides between January and June, compared with 2014. In Saskatchewan, another energy-dependent region, there have been 19% more suicides this year.

Daniel Pavilonis, senior commodity broker with RJO Futures, said the situation was only likely to get worse for those employed in the US energy sector. “There are oil tankers just sitting off the coast because we don’t need more supply. We have too much,” he said. “There’s oversupply and a lack of anybody trying to tighten production because they don’t want to lose market share.”

As a result he predicts oil prices will go lower, taking more jobs with it. But for most consumers, it’s a win. Unlike other global economic trends, the oil price fall actually benefits average Americans, said Pavilonis. “This is our money,” he said. “For most people, it’s a good thing.”

Venezuela


A mural depicts President Nicolás Maduro, who, having lost the Venezuelan National Assembly, has a battle to keep economy and his leadership afloat. Photograph: Luis Robayo/AFP/Getty Images

In most of the world, falling oil prices have caused significant reductions in petrol prices. But in the country with the world’s largest oil reserves, the oil glut could force a price rise.

“It’s probably the only place in the world where with oil prices so low, they may raise gasoline prices,” says Pedro Méndez, an informal taxi driver in Caracas, the Venezuelan capital, who fills the tank of his Ford Laser for less than a dollar.

But the lower the price of oil goes, the deeper Venezuela’s economy sinks. It’s near total dependence on crude exports for hard currency has seen the government of president Nicolás Maduro struggling to try keep the economy afloat.

The political effect is already being felt. Gripped by spiraling inflation, chronic shortages of basic goods and a quickly depreciating currency, Venezuelan voters this month gave the opposition an overwhelming majority in the new legislature, which takes office in January.

Each $1 drop in oil prices results in more than $685m in lost yearly oil income for PDVSA, the state-owned oil company, according to analysts.

And every drop in crude prices means less funding for the health, education and housing and other social welfare programmes that won Maduro’s predecessor, Hugo Chávez, widespread support for his self-styled “Bolivarian revolution”.

While dwindling oil revenue hurts the social programmes, Antonio Azpurua, a financial consultant with CFS Partners/LA Group, says it could be a blessing in disguise, allowing Venezuela to wean itself of its dependence on crude. “Venezuela needs to take advantage of low oil prices to build its industrial base,” he says.

With a super-majority in the National Assembly, the opposition could reverse some of Maduro’s populist measures, which have contributed to the current economic crisis. They could also choose to raise petrol prices.


Iran

Iranians took to the streets to celebrate the nuclear deal which will mean they can more freely trade their oil. Photograph: Abedin Taherkenareh/EPA

Iran is rushing to implement the landmark nuclear accord in order to cash in on sanctions relief as early as next month, but the plummeting price of oil is tempering its expectations even though its economy has become less dependent on crude sales.

Tehran currently exports 1.1m barrels of oil per a but the Iranian oil minister, Bijan Zanganeh, has announced that the country is aiming to double that amount within six months of sanctions being lifted, hoping it will return to the pre-sanctions level of 2.2m.

Although the EU lifted Iranian sanctions in October after the Vienna nuclear agreement, the measures will only come into effect after what has become known as “implementation day”, the unknown date when the UN nuclear watchdog, IAEA, will verify that Iran has taken the necessary steps as outlined under the nuclear deal. Iran is expediting whatever it can to bring this date forward to as early as January.

In an effort to woo foreign investment in the post-sanctions era, Iran put a set of new lucrative oil and gas contracts, worth more than $30bn, on the market this month. But all these efforts have come at a time when global oil prices are falling as a result of a crude surplus of 2m barrels a day, a phenomenon Tehran blames on the Saudis.

“The drop in oil prices hurts all oil producers, not just Iran,” said Amir Handjani, president of PG International commodities trading services and a member of the board directors of RAK Petroleum.

“Saudi Arabia is very aware that Iran will be able to sell its crude unencumbered by sanctions on the international market very soon and will use all means at its disposal to make sure Iran doesn’t recapture the market share it lost over the past four years,” he said.

“Basically, Riyadh’s message to Tehran is simple: we can endure low oil prices for a while; can you?”

But the experience of years under sanctions has made the Iranian economy “incredibly resilient”, according to Handjani. Iran’s economy faced huge economic problems in recent years due to international sanctions imposed over Tehran’s nuclear programme. Plummeting oil prices only added to economic woes in a country with the world’s fourth-largest oil reserves.

“To be sure, low oil prices deny Tehran much needed revenue but unlike the Saudis, Iran’s economy is not solely dependent on oil exports. Oil revenue accounts for about 15% of Iran’s GDP,” Handjani told the Guardian. Sanctions have forced Iran to diversify its economy, he said. It has a large manufacturing base, IT sector, and robust agro-industries, which make its economy on the whole “much more balanced” than Saudi Arabia.

“The Iranian economy has absorbed so many shocks over the past 36 years, from war to sanctions, that the pain of low oil prices now, as it breaks from international isolation, pales in comparison.”

Without naming Saudi Arabia, Zanganeh said last week that it was clear which country had an excess of supply and that there was “no ambiguity about who they are”. On the occasion of unveiling new oil contracts, the Iranian minister said last month that his country was willing to play a major role in oil supply and was even ready to work with American companies. “The way for the presence of these companies in Iran’s oil industry is open,” he said at the Iran Petroleum Contracts Conference in Tehran.

The deputy managing director of the national Iranian oil company (NIOC) told the Guardian in September that the Iranian government was earning more from tax than oil for the first time in almost half a century as the country shifts its traditional reliance on crude to taxation revenues in the face of falling oil prices. Critics say Iran is unlikely to maintain that equation when the lifting of sanctions allows it to export more oil.

According to Opec, Iran on average was selling oil at $38.92 a barrel in November, $5.63 less than the average in October, which is the worst drop among the group’s members.


Libya


Fuel depots and tankers have been targets for years in the struggle for control of Libya and its oil resources. Photograph: EPA

Plunging oil prices are threatening disaster in Libya, where civil war has left the population depending on fast-dwindling oil revenues to survive.

Libya has Africa’s largest oil reserves and in normal times this provides 95% of the country’s export revenues, keeping the economy afloat. But civil war between rival governments at either end of the country has shattered the economy, leaving the population almost wholly dependent on revenue generated overseas.

The crash in oil prices has halved revenues, and shortages of foodstuffs and medicines – even petrol – are starting to be felt.

This cash squeeze has triggered a three-way battle for control of what remains of the country’s oil wealth. Much of Libya’s largest group of oil fields, the Sirte Basin, is now held by Islamic State, which has interposed itself between forces of the rival governments. Most of what remains is in eastern Libya, held by the elected parliament based in Tobruk.

Tobruk is using its status as the internationally recognised government to battle in foreign courts for the right to income from other producing fields, opposing the state-owned National Oil Corporation, whose headquarters remains in Tripoli, held by a rival parliament.

Tobruk has set up a second National Oil Corporation, based in eastern Libya, and last month demanded international oil companies switch payments that currently go to Tripoli.

Countering that, Tripoli’s NOC chief, Mustafa Sanallah, convened a conference in London in October calling on oil buyers to stick with him. Two of the world’s largest oil buyers, Glencore and Vitol, have agreed, but the eastern government has vowed legal action.

London courts are likely to be the proving ground for this test of wills, with both governments already gearing up for a precedent-setting high court battle, due early next year, for control of the Libya Investment Authority, the country’s £65bn sovereign wealth fund.

But whoever wins control of what remains of the oil industry may find it a pyrrhic victory. John Hamilton, director of London’s Cross-border Information, says the glut of oil on world markets and turbulence around the few remaining oil ports means Libyan oil has already been “priced out” by many buyers.

Tuesday, 22 December 2015

Zimbabwe to make Chinese yuan legal currency after Beijing cancels debts

Yuan becomes the latest currency to be approved for public transactions in Zimbabwe, as the southern African nation seeks to increase trade with Beijing


 
The yuan will become legal tender after Chinese president Xi Jinping visited Zimbabwe in early December for talks with president Robert Mugabe. Photograph: Huang Jingwen/Xinhua Press/Corbis


Agence France-Presse


Zimbabwe has announced that it will make the Chinese yuan legal tender after Beijing confirmed it would cancel $40m in debts.


“They [China] said they are cancelling our debts that are maturing this year and we are in the process of finalising the debt instruments and calculating the debts,” minister Patrick Chinamasa said in a statement.




Robert Mugabe greets China's Xi Jinping as 'true and dear friend' of Zimbabwe



Chinamasa also announced that Zimbabwe will officially make the Chinese yuan legal tender as it seeks to increase trade with Beijing.

Zimbabwe abandoned its own dollar in 2009 after hyperinflation, which had peaked at around 500bn%, rendered it unusable.

It then started using a slew of foreign currencies, including the US dollar and the South African rand.

The yuan was later added to the basket of the foreign currencies, but its use had not been approved yet for public transactions in the market dominated by the greenback.

Use of the yuan “will be a function of trade between China and Zimbabwe and acceptability with customers in Zimbabwe,” the minister said.

Zimbabwe’s central bank chief John Mangudya was in negotiations with the People’s Bank of China “to see whether we can enhance its usage here,” said Chinamasa.

China is Zimbabwe’s biggest trading partner following Zimbabwe’s isolation by its former western trading partners over Harare’s human rights record.

In reaction veteran president Robert Mugabe adopted a “look East policy”, forging new alliances with eastern Asian countries and buttressing existing ones.

In early December, Chinese president Xi Jinping stopped over in Zimbabwe in a rare trip by a world leader to the country, and presided over the signing of various agreements, mainly to upgrade and rebuild Zimbabwe’s infrastructure such as power stations.

Saturday, 19 December 2015

Vyapam - The mystery of India’s deadly exam scam

Aman Sethi in The Guardian

On the night of 7 January 2012, a stationmaster at a provincial railway station in central India discovered the body of a young woman lying beside the tracks. The corpse, clothed in a red kurta and a violet and grey Puma jacket, was taken to a local morgue, where a postmortem report classified the death as a homicide.

The unidentified body was “a female aged about 21 to 25 years”, according to the postmortem, which described “dried blood present” in the nostrils, and the “tongue found clenched between upper and lower jaw, two upper teeth found missing, lips found bruised”. There was a crescent of scratches on the young woman’s face, as if gouged by the fingernails of a hand forcefully clamped over her mouth. “In our opinion,” the handwritten report concluded, “[the] deceased died of asphyxia (violent asphyxia) as a result of smothering.”




Three weeks later, a retired schoolteacher, Mehtab Singh Damor, identified the body as his 19-year-old daughter Namrata Damor – who had been studying medicine at the Mahatma Gandhi Medical College in Indore before she suddenly vanished one morning in early January 2012. Damor demanded an investigation to find his daughter’s killer, but the police dismissed the findings of the initial postmortem, and labelled her death a suicide.

The case was closed – until this July, more than three years later, when a 38-year-old television reporter named Akshay Singh travelled from Delhi to the small Madhya Pradesh town of Meghnagar to interview Namrata’s father. Singh thought that Namrata’s mysterious death might be connected to an extraordinary public scandal, known as the Vyapam scam, which had roiled the highest echelons of the government of Madhya Pradesh.

For at least five years, thousands of young men and women had paid bribes worth millions of pounds in total to a network of fixers and political operatives to rig the official examinations run by the Madhya Pradesh Vyavsayik Pariksha Mandal – known as Vyapam – a state body that conducted standardised tests for thousands of highly coveted government jobs and admissions to state-run medical colleges. When the scandal first came to light in 2013, it threatened to paralyse the entire machinery of the state administration: thousands of jobs appeared to have been obtained by fraudulent means, medical schools were tainted by the spectre of corrupt admissions, and dozens of officials were implicated in helping friends and relatives to cheat the exams.


A fevered investigation began, and hundreds of arrests were made

A fevered investigation began, and hundreds of arrests were made. But Singh suspected that the unsolved murder of Namrata Damor – and the baffling insistence of the police that she had flung herself from a moving train – might be part of a massive cover-up, intended to protect senior political figures, all the way up to the powerful chief minister of Madhya Pradesh.

By the time Singh came to interview Mehtab Singh Damor, the Vyapam scam had begun to seem like something more deadly than an unusually large bribery scandal. Since 2010, more than 40 doctors, medical students, policemen and civil servants with links to the Vyapam scam had died in mysterious circumstances.

The state government, under relentless pressure from its political opponents, insisted that none of the dead had been murdered – the media, they contended, had simply stitched together a series of unconnected natural deaths. “Whoever is born has to die one day,” the state’s home minister, Babulal Gaur, said in a memorable TV interview, citing Hindu scripture. “This is the mrityu lok” – the realm of death.
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When Akshay Singh arrived at the Damor home, Namrata’s father sat him down on a heavy wooden armchair in his living room, silenced the television, and handed over a well-thumbed file stuffed with photocopies of petitions, police reports, and court papers. Tea arrived on a tray; Singh picked up a cup and turned his attention to Namrata’s postmortem report and the coroner’s feathery scrawl.

As he sipped his tea, Singh turned as if to ask a question, but his face froze, his left arm shivered, his open mouth gasped for air, tiny bubbles of spittle formed on his lips before he collapsed in his chair, the dead woman’s case file motionless in his lap.

“We lay him down on the floor, loosened his clothes and sprinkled his face with water,” recalled Rahul Kariaya, an Indore-based journalist who took Singh to Damor’s house, “I checked his pulse and I knew right away, Akshay Singh was dead.”
* * *

Within hours of Singh’s death, the long-simmering Vyapam scandal exploded from the inside pages of newspapers on to primetime television. It soon emerged that the Madhya Pradesh police had ended their investigation into Namrata Damor’s death on the basis of a second postmortem report, prepared by a doctor who later admitted that he had not examined the body and had based his findings solely on photographs provided by the police. Namrata Damor, according to this postmortem, had killed herself because of a failed relationship.

“I want everyone across the country to ask themselves one question,” the country’s most bombastic TV news presenter, Arnab Goswami, bellowed one night in July, waving copies of both postmortem reports on his popular nightly programme. “How does a postmortem come to the conclusion, [without] using any evidence, that the ‘victim is disappointed in love and has caused annoyance of her parents?’”
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The Vyapam scandal began as an old-fashioned scam in a country with a long and storied history of corruption. Officials at the testing agency, along with their political backers and a network of fixers and touts, had charged preposterous sums of money to guarantee candidates either a government job or admission to a state medical college by fixing the results of the entrance examinations. Cheating of this sort was not a new phenomenon – but the enormous scale of the racket, the involvement of top government officials and medical colleges, and the alleged murder of suspects made the Vyapam scam into an explosive political controversy. The four-week long summer session of the Indian parliament in 2015 was completely paralysed by demands from the opposition Congress party for the resignation of Shivraj Singh Chouhan, the Bharatiya Janata Party (BJP) chief minister of Madhya Pradesh.

When the scandal first became public in 2013, the Madhya Pradesh government assembled a special taskforce of state police officers to investigate the allegations. It moved quickly, sweeping up everyone from individual students and their parents to the chief minister’s personal secretary. By the time of Singh’s sudden death in July 2015, the taskforce had already arrested an astonishing 2,235 people – of whom 1,860 were released on bail after questioning.

The list of top state officials placed under arrest reads like the telephone directory of the Madhya Pradesh secretariat. The most senior minister in the state government, Laxmikant Sharma – who had held the health, education and mining portfolios – was jailed, and remains in custody, along with his former aide, Sudhir Sharma, a former schoolteacher who parlayed his political connections into a vast mining fortune. Another minister, Gulab Singh Kirar, simply disappeared rather than face questioning from the police. (Many of those accused have protested their innocence, but it may take years for the prosecution to secure any convictions.)

Among those detained by the taskforce were half a dozen aides to top state ministers – but from the start, opposition parties insisted that the probe was an elaborate charade, intended to convey a sense of urgency to the public while protecting the chief minister. The preponderance of aides among the arrested fuelled speculation that underlings had been forced to fall on their swords to protect their bosses.

And then, as the investigation widened, people started dying. Some had perished before the taskforce had a chance to interrogate them – such as Anuj Uieke, a medical student accused of working as a middleman connecting exam aspirants and Vyapam officials. He died along with two friends also accused of involvement in the scam when a truck ploughed into their car in 2010. Others apparently took their own lives, like Dr Ramendra Singh Bhadouriya, who was accused of cheating his way to a medical college seat in 2008 and then helping others do the same. He was found hanging from the ceiling fan in his home in January 2015. (Five days later, his mother took her own life by drinking acid.) Another suspect, Narendra Tomar – a seemingly healthy 29-year-old veterinary doctor at a government hospital, who had been arrested for his role as a middleman in the scam – had a sudden heart attack in jail this June and died in hospital the next day.


In July 2014, the dean of a medical college in Jabalpur, Madhya Pradesh, Dr SK Sakalle – who was not implicated in the scandal, but had reportedly investigated fraudulent medical admissions and expelled students accused of obtaining their seats by cheating – was found burned to death on the front lawn of his own home. The police initially maintained that Sakelle had doused himself in kerosene and set himself alight; an unusual means of suicide for a doctor with easy access to a wide range of toxins. But they were forced to reopen their investigation one year later, when Sakelle’s colleague and close friend, Dr Arun Sharma, who took over as dean of the medical college, was found dead in a Delhi hotel alongside a half-empty bottle of whisky and a strip of anti-depressant pills.
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In March of this year, Shailesh Yadav, the 50-year-old son of the governor of Madhya Pradesh – the formal head of state government, appointed by the president of India – died of a suspected brain haemorrhage in his family home. Both the governor and his son were implicated in the scam.

Each new death brought a flurry of headlines, and increasingly excited speculation about conspiracies and cover-ups. “Who is killing all these people?” the TV presenter Goswami demanded on air one night – inviting viewers to tag their tweets on the story with #KillingAScam.

Through it all, the government of Madhya Pradesh insisted that the series of deaths was nothing more than a coincidence – a conspiracy theory cooked up by its political opponents – and that the state police taskforce was conducting an exemplary investigation of the scandal. But the death of Akshay Singh, which brought the national spotlight on to the case, forced the government to ask for a probe by the notionally autonomous Central Bureau of Investigation (CBI). In an interview with the Indian Express newspaper, Chouhan, the chief minister of Madhya Pradesh, said he was satisfied by the state police investigation, but agreed to a CBI investigation to clear “an atmosphere of falsehood” that “would have eventually affected the wellbeing of the state”.

When I arrived in the state capital, Bhopal, a beautiful city of lakes, greenery, and double-storey buildings, at the end of July, the local press had coined a cruel pun on the chief minister’s first name. Rather than Shivraj – after the Hindu god Shiva – they were calling him Shavraj, or King of the Corpses.
* * *

In 2013, the year the scam was first revealed, two million young people in Madhya Pradesh – a state the size of Poland, with a population greater than the UK – sat for 27 different examinations conducted by Vyapam. Many of these exams are intensely competitive. In 2013, the prestigious Pre-Medical Test (PMT), which determines admission to medical school, had 40,086 applicants competing for just 1,659 seats; the unfortunately named Drug Inspector Recruitment Test (DIRT), had 9,982 candidates striving for 16 vacancies in the state department of public health.

For most applicants, the likelihood of attaining even low-ranking government jobs, with their promise of long-term employment and state pensions, is incredibly remote. In 2013, almost 450,000 young men and women took the exam to become one of the 7,276 police constables recruited that year – a post with a starting salary of 9,300 rupees (£91) per month. Another 270,000 appeared for the recruitment examination to fill slightly more than 2,000 positions at the lowest rank in the state forest service.

It was on the morning of the medical exam in 2013 that the Vyapam scandal began to unravel. A team of policemen raided the Hotel Pathik, a seedy £5-a-night motel on the outskirts of Indore, the largest city in Madhya Pradesh.

In room 13, the police came upon a young man readying himself for that morning’s exam. He handed over a voter identity card, introducing himself as exam candidate Rishikesh Tyagi, but when the police asked him his father’s name and his date of birth, he said he could not remember.

“On doing strict interrogation,” a police report of the incident reads, “he told his correct name as Ramashankar … he told us he came to give the examination in the name of Rishikesh Tyagi.”

Ramashankar, the police alleged, was already studying medicine in Uttar Pradesh, and had accepted 50,000 rupees (£500) to take the exam on behalf of Rishikesh Tyagi. Twenty such impostors were arrested that morning, 18 of whom had come from out of town to impersonate young students who felt they could not pass the entrance exams themselves.
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The impersonators led the police to Jagdish Sagar, a crooked Indore doctor who had set up a lucrative business that charged up to 200,000 rupees (£2,000) to arrange for intelligent but financially needy medical students to sit examinations on behalf of applicants who could afford to pay. Police claimed that Sagar had amassed a fortune in land, luxury cars, and jewellery from the racket: according to a report in the Hindustan Times (headline: “Vintage Wine, Bed of Cash”), he slept on a mattress stuffed with 1,300,000 rupees. But Sagar, one policeman told me, was only the most prominent of a swarm of middlemen who offered similar services.

Standardised testing in India is a heroic and misguided attempt to compensate, over three short hours, for a young lifetime’s worth of inequities of caste, class, gender, language, region and religion, and the crushing inadequacy of the state-run schooling system. It is the only consideration for achieving college admissions or government employment. Nothing else matters – not your grades over 12 years of school, nor any hobbies, interests or transformative life experiences.

The competition is so intense, and India’s schools so poor that, according to the National Statistics and Sampling Office, a quarter of all students in India are enrolled in tuition centres. In some states, that figure is as high as 90%. The private tuition industry grew 35% over a five-year period from 2008 to 2013, as reported in a 2013 survey by the Indian Associated Chambers of Commerce and Industry, and is expected to be worth around £27bn by 2015.

This fevered demand for after-school classes has turned tuition centres into well-known brands – represented by star students who have secured the highest test results, whose bespectacled and slightly woebegone faces are plastered, like football stars, on billboards along rural highways, crowded railway stations, dusty bus stands, and outside schools and colleges.

The tuition industry has taken over entire towns, such as Kanpur in Uttar Pradesh, where students come from across the country to sleep in cramped hostels, subsisting on fried snacks and shuttling from coaching centre to coaching centre under the tutelage of “celebrity” teachers. While established centres advertise “world-class” facilities and faculties, less well-known institutes offer tales of improbable success, such as the poster I saw in Kanpur for a centre called The New Tech Education, featuring four young women in hijab and celebrating a “Miracle in the history of pre medical institute, all the 4 sisters of middle class family became doctor.”

The explosion of tuition centres, and the scarcity of jobs, has only intensified the desperation to grasp the tiny number of university places and jobs that are made available each year. “The impostor system has its roots in the world of the tuition centres,” I was told by a medical student who I met at his college hostel in Gorakhpur, in the neighbouring state of Uttar Pradesh, where Sagar had recruited most of his fraudulent candidates. “Centres conduct weekly exams and post the results on their bulletin boards, which makes it easy for touts to spot both – bright students who can work as impostors, and weak students looking to cheat their tests,” he said.


Once I started doing well in my tests, touts started calling, promising me 100,000 rupees for two days’ work

“Once I started doing well in my tests, touts started calling me every week promising me 100,000 rupees (£1,000) for two days’ work. He said, I’d be flown to an examination centre, put up in a five-star hotel, and flown back to home – all I had to do was solve a paper.” My source said he had declined their overtures – but one of his classmates did not, and is now in jail in a Vyapam-related case.

Beginning in the late 1990s, investigators allege, Sagar and his out-of-town impostors helped hundreds of students cheat the medical exams. But eventually Sagar’s ambitions widened, and he turned to a man called Nitin Mohindra.
* * *

Nitin Mohindra is a short, pudgy man with a receding hairline, descending paunch, and lampshade moustache, who joined Vyapam in 1986 at the age of 21 as a data entry operator. By the time he met Jagdish Sagar, he had risen through the ranks to become the agency’s principal systems analyst, without ever drawing much attention to himself.

His colleagues recalled that he had only twice been the subject of any office gossip – both times for arriving at work in slightly flashy new cars: a Honda City in 2008, and Renault Duster SUV a few years later. “And he wore very nice shirts,” one colleague told me. “Nothing fancy, but you could tell that the material was just better quality than everyone else’s shirts.”

In 2009, police claim, Sagar and Mohindra had a meeting in Sagar’s car in Bhopal’s New Market bazaar, where the doctor made an unusual proposition: he would give Mohindra the application forms of groups of test-takers, and Mohindra would alter their “roll numbers” to ensure they were seated together so they could cheat from each other. According to Mohindra’s statement to the police, Sagar “offered to pay me 25,000 rupees (£250) for each roll number I changed.”



This came to be known as the “engine-bogie” system. The “engine” would be one of Sagar’s impostors – a bright student from a medical college, taking the exam on behalf of a paying customer – who would also pull along the lower-paying clients sitting next to him by supplying them with answers.
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Vyapam officials showed me seating plans from examination centres to illustrate how Mohindra ensured that engines and bogies not only sat together, but were allotted seats in the last few benches in each examination room – far from the moderator – to make it easier for them to cheat. From 2009 to 2013, the police claim, Mohindra tampered with seating assignment for at least 737 of Sagar’s clients taking the state medical exam.

The scam became even more sophisticated in 2011, when the Madhya Pradesh state government appointed Pankaj Trivedi, a lecturer at a government college in Indore, as the controller of examinations at Vyapam – responsible for ensuring the security of the testing process. According to the police, Trivedi, who is now in jail, came under pressure from influential state ministers and officials to provide jobs and admissions for their relatives and friends. New to the job, Trivedi turned to Mohindra, who devised a solution that was dazzling in its simplicity. Students who had paid to have their results fixed were told to attempt only those questions for which they knew the answers, and leave the rest blank.

“Mohindra hooked all of Vyapam’s computers to a common office network and retained all administrator privileges,” said Tarun Pithode, an energetic young civil servant who was appointed Vyapam’s new director to set things straight after the scam broke. After the multiple-choice exam sheets were scanned, Mohindra could access the computer that stored the results, and alter the answers as he wished.

Once the results had been altered on the computer, Mohindra would approach the exam observers and ask for the original answer sheet, claiming that the student had requested a copy under India’s Right to Information Act. He would then sit in Trivedi’s office and fill out the originals so that they tallied with the altered version saved on the computer

The most glaring example of this method was discovered in the case of Anita Prasad, a daughter of Prem Chand Prasad, the personal secretary to Chief Minister Chouhan. She had passed the PMT exam in 2012 with the assistance of Trivedi and Mohindra – but failed to follow their instructions, and attempted to answer all of the questions, many of them incorrectly. When police investigators later obtained a copy of her original answer sheet, they found that Vyapam officials had used correction fluid to blank out her wrong answers and pencil in the correct ones instead.

“In our review, we found almost every system had been subverted,” Pithode said. “For example, every question paper set has an ‘answer key’ that is put into a self-sealing envelope before the exam and opened only at the time of tabulating results. Trivedi would seal the envelope in the presence of observers, but later would simply tear open the envelope, make copies of the key, and put the original document into a new envelope.”

Over the course of only two years, police allege, Mohindra and Trivedi conspired to fix the results of 13 different examinations – for doctors, food inspectors, transport constables, police constables and police sub-inspectors, two different kinds of school teachers, dairy supply officers and forest guards – which had been taken by a total of 3.2 million students.

Amidst this tangle of impostors, engine-bogies and altered answer sheets, the police soon found a spreadsheet on Nitin Mohindra’s hard drive that listed the names of hundreds of students who had paid to cheat the exams – along with the names of the minister, bureaucrat or fixer who had referred the student to Mohindra and the agreed payment.

The list included political heavyweights such as Uma Bharati, a former chief minister of Madhya Pradesh who is now the water minister in Prime Minister Narendra Modi’s cabinet – and a longtime rival of Shivraj Singh Chouhan.

With the police in possession of Mohindra’s spreadsheet and a ready list of suspects, the case seemed to be heading to a speedy closure. But in February this year, the opposition Congress party – which had been demanding for months that Chouhan resign over the scam – made a startling claim. The police taskforce, they alleged, had tampered with the spreadsheet of conspirators to remove the name of the chief minister and replace it with the names of his rivals. The changes were made in “at least 48 places”, the Congress leader Digvijaya Singh – another former chief minister of Madhya Pradesh – claimed when we met in his office in New Delhi. “The chief minister’s name was either removed all together, or replaced with the name of Uma Bharati.”
* * *



The Central Bureau of Investigationtook over the case in July of this year. But there is little reason to believe that its findings will resolve the scandal. In 2013, India’s Supreme Court famously described the country’s premier investigating agency as a “caged parrot” for its susceptibility to political pressure from the reigning central government. And while the investigation drags on, it has been further muddied by an elaborate and increasingly impenetrable series of allegations and counter-allegations between the ruling BJP and the opposition Congress over the veracity of the evidence seized from Mohindra’s computer.

Two days after Mohindra’s arrest in 2013, a policeman showed up at the office of Prashant Pandey, a cyber-security expert with pointed sideburns, bouffant hair, a handlebar moustache and a taste for fitted waistcoats.

Pandey is the proprietor of a firm called Techn07. In a detailed resume he sent me after our first meeting, Pandey claimed to have helped the Madhya Pradesh police crack cases involving Islamist terrorists, tax evaders, kidnappings, and political murders – along with the Vyapam investigation. (The head of the Vyapam taskforce did not respond to multiple requests for comment, but state officials and police officers confirmed that Pandey had done work for the Indian Revenue Service and the Vyapam taskforce.)

“The policeman said his seniors had seized a hard drive from a suspect, but the local police station did not have a SATA cable to connect it to their desktop,” Pandey recalled when we met in his lawyer’s office in Delhi. “I gave him a cable, but the policeman wanted to make sure the connector was working and so he plugged it into one of my computers.” Pandey said that once he connected the drive, his computer automatically began to make a mirror image. The policeman had a cup of tea and left.

Two months later, Pandey said, the Vyapam taskforce paid him to install hidden cameras in their interrogation cells in Bhopal. (Pandey showed me a bill, dated March 2014, for a “bullet camera”, a Sony voice recorder, and various accessories, along with copies of cheques from the state finance ministry, to prove he had worked for the government in the past.)

Pandey said that he had worked for the Vyapam taskforce for more than six months – until the relationship soured in June 2014, when the Congress party released phone records alleging that Sadhna Singh, the wife of Shivraj Singh Chouhan, had made 139 calls from the chief minister’s residence to the ringleaders of the scam, Nitin Mohindra and Pankaj Trivedi. (The chief minister dismissed the allegations as a fabrication, and the matter was never investigated by the police.)

The police arrested Pandey, and jailed him on charges of trying to sell confidential phone records. His computers were seized, he said, and he was interrogated for three days. “All they asked me was, ‘What do you know about the chief minister and Vyapam.’” He was released on bail, but claims he was picked up again in the middle of the night, and taken to a safe house for further interrogation. “They said, you give anyone any more information and you are finished,” he told me.


I decided to fight back and expose all these corrupt officials. I realised that the police had doctored the evidence

“I decided to fight back and expose all these corrupt officials,” Pandey continued. “I realised that I had a mirror image of Nitin Mohindra’s hard drive, and on comparing the Excel sheet submitted by the police in court, and the Excel sheet from my copy of Mohindra’s hard drive, I realised that the police had doctored the evidence to save the chief minister.” Through his lawyer, Pandey leaked the information to the Congress leader Digvijaya Singh, who released it to the public.

The state government insists that it is Pandey – and the Congress party – who have tampered with the evidence. The Madhya Pradesh police submitted Mohindra’s hard drive to a government forensic laboratory in Gujarat, which certified the authenticity of their version of the document. Pandey’s lawyers, on the other hand, submitted his copy of the spreadsheet to a well-regarded private forensic lab in Bangalore, which verified that his was the original copy. So the BJP-led government has its own version of the evidence, and the Congress opposition has another – a neat parable for the general condition of Indian political debate. It will fall to the Supreme Court (and perhaps yet another forensic lab) to decide whose report to believe.
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In the meantime, Mohindra’s lawyer, Ehtesham Qureshi, has seized on the controversy to insist that the case against his client has been fabricated. “If the police have altered the Excel sheet in my client’s hard drive,” Qureshi told me, “how can we trust any of the supposed evidence seized from his computer?” The police, he alleges, have kept Mohindra in jail for two years by filing a succession of cases against him, one each 90 days, to prevent him from becoming eligible for bail. “My client, who is a poor, middle-class person, is being made a scapegoat to protect the wealthy and powerful,” Qureshi said. “They are going to keep him in forever, because if he gets out and starts speaking, who knows what will happen.”
* * *

When I met Rajendra Shukla, Madhya Pradesh’s minister for public relations, power and electricity, and mines and minerals – the man with the unenviable task of managing the fallout from the Vyapam scam – he calmly insisted that the massive scale of the multiple ongoing investigations was proof that the state government had nothing to hide.

“Several senior people have been arrested in connection with this case,” Shukla told me one evening at his residence in Bhopal. “This means no one is being shielded and the probe has been conducted in a fair way.” He declared that the chief minister was completely innocent, and added – very plausibly – that “if senior people had not been arrested, the opposition would have said this is a cover up.”

But what of the deaths? “Please read this booklet,” Shukla said, reaching for a glossy pamphlet titled Vyapam: Propaganda and Reality. “It should answer most of your questions.”

The 23-page booklet, which the state government has distributed widely in Madhya Pradesh and Delhi, praises Chouhan’s administration for its swift and decisive action in appointing a police taskforce to investigate the case, and reviews each fatality alleged to be connected to Vyapam in succinct paragraphs, nearly all of which end with some variation on the following phrase: “The family has not expressed any doubt about his death so far.”

The booklet considers the deaths of 31 people: 11 died in road accidents, five allegedly committed suicide, two drowned in ponds, and three lost their lives to “excessive liquor consumption” – all of which have come under suspicion precisely because of the apparent reluctance of the state police to investigate any of the deaths allegedly connected to the scandal. Shukla and his government, however, insist that all these deaths, while tragic, have no connection to the Vyapam scandal to begin with.

Namrata Damor, the young woman found dead on the railway tracks in 2012, is not mentioned in the government’s list of deaths allegedly linked to Vyapam. When I met her father Mehtab, however, he also insisted that his daughter had no connection to the scam.

But why would anyone want to kill his daughter? “She fell into bad company,” he said, “When a young girl from a small town like Meghnagar goes to a city like Indore, there are always people who could prey on her.”

Yet after our meeting, I spoke to Rahul Karaiya, the local journalist who had gone to interview Damor with the television reporter Akshay Singh shortly before Singh’s death – which remains unsolved. Karaiya sent me a video clip from a “sting operation” that had been conducted by a local TV station four years earlier.

The clip, from 2011 – prior to Damor’s death – records Gaurav Patni, who identifies himself as a fourth-year student at a city medical college, speaking with a reporter on the assumption that his camera was off. Patni claims that he is planning to get out of the business of fixing Vyapam exams because of the increasing difficulty in getting people through and collecting their payments.



“Last year we got only two students through, I’ll even tell you the names,” he says, “One is a girl from Indore, Namrata Damor … You can ask around, they haven’t even paid as yet.”



Was Namrata killed because she did not, or could not, pay whoever had rigged her exam? Her father, understandably, refused to entertain such speculation. He said the police, who had left him waiting years for any news in his daughter’s death, were now floating wild theories to cover up their own incompetence.

The police aren’t the only ones floating theories. The scandal was so vast that almost everyone I met in Madhya Pradesh knew someone connected to it – and it quickly became clear that Vyapam had become the stuff of myth and legend: everyone had a theory, and no scenario was too implausible to entertain.

In an interview with the Hindustan Times earlier this year, a policeman, whose own son was accused in the scam and died in a road accident, advanced an unlikely yet tantalising theory. He argued that the Vyapam taskforce – under pressure to conduct a credible probe that nevertheless absolved top government officials – had falsely named suspects who were already deceased in order to shield the real culprits.

A competing theory, voiced by journalists covering the scandal in Bhopal, proposes that it will be all but impossible to determine whether the deaths are connected to Vyapam, because the families of many of the dead refuse to admit that their children paid money to cheat on their exams – for fear that the police might arrest the bereaved parents as well.

All this suggests that it is unlikely that the truth behind the Vyapam deaths will ever be established. Rather than a simple scam, Vyapam appears to be a vast societal swindle – one that reveals the hollowness at the heart of practically every Indian state institution: inadequate schools, a crushing shortage of meaningful jobs, a corrupt government, a cynical middle class happy to cheat the system to aid their own children, a compromised and inept police force and a judiciary incapable of enforcing its laws.
* * *

While the investigation goes nowhere, some of the hundreds of students implicated in the scam have begun to feel like its victims. In Indore, I met a young man who I’ll call Ishan. The son of an impoverished lower-caste family in rural western Madhya Pradesh, neither of his parents can read or write. After moving to Indore in 2007, he spent four years at a series of tuition centres preparing for the medical exam, which he finally passed in 2011. Two years later, when he was a student at medical college, he was swept up in the Vyapam investigation and accused of serving as an agent for one of Jagdish Sagar’s impostors.

“Students preparing for their exams would often approach me for advice,” Ishan told me. “One day a boy asked me for a phone number for a doctor known to Jagdish Sagar. I gave the number because the doctor was our senior from medical school.” Ishan’s friend cleared the exam, was picked up by the police, and mentioned Ishan’s name in the interrogation.


Six years of my life are wasted, my dream of becoming a doctor over. It will take the rest of my life to clear my name

“Now the police claim I am a middleman in the Vyapam scam,” he said, “I spent three months in jail before I was granted bail. My college admission has been cancelled, six years of my life are wasted, and my dream of becoming a doctor is over. I know I will be exonerated, the police have no evidence against me, but it will take the rest of my life to clear my name. Now tell me, why shouldn’t someone in my place commit suicide?”

At a lawyer’s office in Bhopal, I heard a similar tale from a man who had come to help secure bail for his brother, another accused in the scam.

“My brother was arrested four months ago for paying someone to ensure he cleared the police constable exam in 2012,” the man told me. “Some people in our village said, ‘This is Madhya Pradesh, nothing happens without money.’ My brother sold his land and paid them 600,000 rupees.”
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In August that year, he was one of 403,253 people who appeared for the recruitment test to become a police constable. When he passed it was clear to everyone that he had a bright future ahead of him – and so he was soon married off. Four months after his marriage, his name popped up in the scam, he lost his job and he was hauled off to prison.

“So now my brother has a wife and his first child, but no job, no land, no money, no prospects and a court case to fight,” the man said. “You can write your story, but write that this is a state of 75 million corrupt people, where there is nothing in the villages and if a man comes to the city in search of an honest day’s work, the politicians and their touts demand money and then throw him into jail for paying.”

It seemed plausible that some of Vyapam deaths really were suicides – that people did hang themselves, jump off trains, and drink themselves to death rather than meeting their demise at the hands of mysterious assassins. Many of the accused had, at great personal expense, through fraud or perseverance, succeeded in overcoming a system designed to reward a microscopic minority with the lifelong privilege of permanent employment, only to see their rewards snatched away after the fact. But these deaths were not “unrelated to Vyapam”, as the government kept insisting. Rather, they seemed a consequence of the prevailing corruption common to both the scandal and and investigation that shows no sign of ever concluding.

“A scam like this is going to take years to investigate,” a lawyer representing several of the thousands of accused told me. “The CBI just doesn’t have the manpower to investigate so many deaths and arrests. When the CBI took the case from the police, they literally sent a truck to gather all the documents.”

So the case, in all likelihood, will ultimately collapse into a giant, disorganised pile of court hearings and paperwork. Memories of the dead will fade away, while the living spend the rest of their lives appearing in court to defend themselves from the accusation that they once cheated on their exams.
* * *

On 9 October this year, the Supreme Court reviewed the progress of the Vyapam case with some satisfaction, noting that the mysterious deaths had suddenly ceased since the investigation was taken away from the Madhya Pradesh police and handed to the CBI.

“I was wondering that from the time the court had ordered the CBI probe into the case and decided to monitor the investigations,” the chief justice, HL Dattu, asked, “how come not a single death has been reported?”

One week later, the driver of a train en route to Bhopal spotted a corpse on the tracks. The body was later identified as Vijay Bahadur, a retired Madhya Pradesh bureaucrat, who had served as an observer for at least two Vyapam exams. His wife, who had been travelling with him, told the police that Bahadur had stepped out of their train compartment and into the corridor to shut the door of their carriage, and never returned. The CBI has now added Bahadur to the list of suspected Vyapam-related fatalities – and begun an investigation into his death.