Students

India on the brink of its own financial crisis

Canada India Education Council (CIEC)

Source: The Guardian

In a reprise of the 1997-98 Asian crisis, India’s stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.

India’s financial woes are rapidly approaching the critical stage. The rupee has depreciated by 44% in the past two years and hit a record low against the US dollar on Monday. The stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.

In a sense, this is a classic case of deja vu, a revisiting of the Asian crisis of 1997-98 that acted as an unheeded warning sign of what was in store for the global economy a decade later. An emerging economy exhibiting strong growth attracts the attention of foreign investors. Inward investment comes in together with hot money flows that circumvent capital controls. Capital inflows push up the exchange rate, making imports cheaper and exports dearer. The trade deficit balloons, growth slows, deep-seated structural flaws become more prominent and the hot money leaves.

The trigger for the run on the rupee has been the news from Washington that the Federal Reserve is considering scaling back – “tapering” – its bond-buying stimulus programme from next month. This has consequences for all emerging market economies: firstly, there is the fear that a reduced stimulus will mean weaker growth in the US, with a knock-on impact on exports from the developing world. Secondly, high-yielding currencies such as the rupee have benefited from a search for yield on the part of global investors. If policy is going to be tightened in the US, then the dollar becomes more attractive and the rupee less so.

But while the Indonesian rupee and the South African rand are also feeling the heat, it is India – with its large trade and budget deficits – that looks like the accident most likely to happen. On past form, emerging market crises go through three stages: in stage one, policymakers do nothing in the hope that the problem goes away. In stage two, they cobble together some panic measures, normally involving half-baked capital controls and selling of dollars in an attempt to underpin their currencies. In stage three, they either come up with a workable plan themselves or call in the IMF. India is on the cusp of stage three.

Overseas students rarely challenge landlords

Canada India Education Council (CIEC)

Source: The Age

Many other students ‘pushed around in tenancies’.

When Yu Mao moved out of a rental property in Oakleigh she thought recouping her bond would be simple enough. But she was shocked to discover her signature on a claim form relinquishing most of the bond.

Ms Mao, who was an international student when she moved in, insisted she never signed the form. So she took it to police for analysis.

‘‘I had been trying so hard to prove I didn’t sign it,’’ she said.

The police analysis found her signature had been forged but was unable to determine who had written it.

Ms Mao has since become a permanent resident but said international students rarely spoke out about unfair treatment in their housing arrangements. ‘‘I don’t think they know there is a way to complain.’’

And the Council of International Students Australia says exploitation of foreign students in the rental market is rife.

The council’s public relations officer, Mohamed Ehsan Ebrahim, urged universities to ‘‘reach out’’ to students and help protect them from unfair situations. ‘‘A significant number of students have been exploited in the private rental market,’’ he said.

Withholding bonds was among the main problems.

Ms Mao said international students often left their tenancies without demanding their bond because they wanted to get home for their holidays. ‘‘Everyone is trying to leave the country as quickly as possible,’’ she said.

Ms Mao said the real estate agency she had dealt with agreed to return her bond after the police investigated.

Tenants Union of Victoria policy worker Mike Williams said international students rarely challenged their landlords.
‘‘Many international students are just pushed around in their tenancies,’’ he said. ‘‘Often they just don’t stand up for their rights.’’

He urged students to seek advice on their tenancies if they felt they had been mistreated. But few international students sought help from the union.

Hadi, who left Germany to do a PhD in Melbourne, never imagined he’d end up on the street when he moved into a house in Frankston.

But hoped speaking out about his sudden eviction would highlight the exploitation of international students in the rental market.

Hadi said in September he signed a contract that said he would mow the lawn and clean and maintain the house instead of paying rent.

Hadi, who did not want his surname published, said the landlord later demanded $150 a week. He said he agreed to pay $60 a week, but negotiations broke down.

Early this year, Hadi was walking outside his Dandenong workplace and found all his possessions dumped there.

He said a colleague handed him an eviction notice that had also been dropped off.

‘‘I went down to the garage and saw the other colleagues were laughing at me,’’ he said.

Hadi spent the night on a Swanston Street bench before crashing at a backpackers’ hostel in St Kilda for three weeks.

He recently challenged his eviction in the Victorian Civil and Administrative Tribunal and won $1408 in compensation when the rooming house owner failed to appear.

The owner declined to comment.