There was a time when interest rates in Switzerland were far lower than those in the central European countries.  When Hungarians wanted to borrow money, they went to Switzerland.  But then their currency plunged and they were left with staggering debts. At one time recently 70% of household debt in Hungariy was held by Swiss banks.

Victor Urban,, Hungary’s prime minister, came t power in part to correct thsi problem.  A fair banking law is now working its way through Parliament. It would cap interest rates and monthly re-payments.

Hungary had the largest loans, but Poland had almost 38% of household debt in foreign loans in 2009.  Forced conversion from francs to Zlotny would cost Poland as much as 13 billion dollars. Conversion to the euro may help even out indebtedness.

Lucy P. Marcus writes:  Public and private investment in the real economy has been under attack since the 2008 financial crisis. In difficult economic times, it may seem logical to cut investments that yield results only in the long term, and thereby conserve money and resources to address short-term problems. In fact, cutting investment in our future – be it in people, the planet, political institutions, or business – is deeply irrational.

It is only through investment in visionary ideas, blue-skies thinking, research and development, and innovation that we can ensure that the future will be better – freer, more peaceful, and more prosperous – than the past.

Early-childhood education, preventive medicine, libraries, physical infrastructure, and basic scientific research, for example, all cost money – and studies show that they are worthwhile. But when policymakers need to cut spending, investment in these public goods is often the first thing to go, because voters do not feel the effects in the short term. Most of the pain is deferred, which is precisely why such cuts are politically attractive.

But this is low-hanging fruit that societies cannot afford to pick. We must start investing in people at the earliest possible moment – right from birth. Universal access to high-quality nutrition and preventive health care, as well as early-childhood learning programs, are necessary to provide strong foundations upon which countries around the world can ensure their future social advancement and economic growth.

Likewise, for children and adults alike, there is real value in, say, public libraries – secular and free gathering spaces that offer universal access to learning and, increasingly, provide a gateway to digital services. The same is true of cultural programs and institutions that stimulate growth in the arts and sciences; they, too, are necessary to ensure that citizens can contribute productively to their societies and economies.

The temptation to cut long-term investment in economic hard times stalks the private sphere as well. And companies around the world, big and small, have been succumbing to it since the beginning of the global economic downturn. As companies are forced to look to their bottom line and become leaner, they cut investment in research and development, employee development and training, infrastructure, and more. Making matters worse, these budget lines are the last to be restored when economic prospects brighten.

For example, in the face of investor pressure, pharmaceutical companies have cut their research activities dramatically, relying instead on acquisition strategies. The aim is to “de-risk” by buying up firms that have already carried out all of the costly blue skies research and have developed proven drugs.

Obviously, such strategies will not work in the long term if no one is willing to invest in the earliest stages of research in critical areas like biotechnology, digital technology, renewable energy sources, and the like. With early-stage investors scarce, governments turning away from blue-sky science, and funders of university-based research increasingly demanding that grantees’ show the “impact” of their work, who will fund risk-taking? If no one does, the well will run dry, and there will be nothing to acquire.

Likewise, instead of investing in new infrastructure, companies patch up the old. But patching broken things can work for only so long. By not committing resources to invest in new, cost-efficient, environmentally-friendly operations, or in developing the skills and knowledge of employees, or in innovation, companies will find that their short-term savings come at the expense of their long-term success.

The choices that companies are making not only affect their own operations, but also have profound consequences for their customers, suppliers, and the societies in which they are embedded. Failure to invest in the future will affect that future for everyone.

Not everything that is worthwhile has an immediate positive effect on financial bottom lines, or can be put neatly in a box. If public and private investment decisions are driven only by the easily measured and easily defined, we will miss out on the breakthrough moments that characterize so much of human achievement and advancement.

In both the public and private sectors, we need to commit ourselves to long-term investment, whether in children and education, science and technology, and health and medicine, or in building strong institutions that can serve as the sustainable foundations of peaceful, democratic, and prosperous societies. An investment in our future is never wasted. Investing in beginnings is the only way we will live to see happy endings.

Prime Minister Haider al-Abadi of Iraq and Prime Minister Ahmet Davutoglu of Turkey meet in Teheran.   In the Iraqi capital, from shopping malls to fancy hotels to the shelves of grocery stores, the influence of Turkish business is ample, underscoring an economic relationship between Turkey and Iraq has flourished even as the diplomatic relationship has soured in recent years.

Now, with the new Iraqi government struggling to keep the country together while under attack from Islamic State militants, and with Turkey dialing back its ambitions of leading a Sunni political axis that would reshape the region, the two countries are trying to come together amid mutual suspicion.

The visit by Prime Minister Ahmet Davutoglu, the first from a Turkish prime minister in nearly four years, was a vivid example of a scramble taking place all across the Middle East, as former adversaries are seeking to mend relationships, or at least try to work together, at a time of unprecedented crisis.

Mr. Davutoglu’s visit on Thursday came a week after a tentative agreement between Baghdad and officials in Erbil, the Kurdish capital, that restarted budget payments to the Kurds and allowed the Kurds to export some of their own oil.

Anu Madgavar and Rakesh Mohan write: India’s economy could soon be on the move again. The new government is re-establishing fiscal discipline and energizing the bureaucracy, fueling optimism that rising business confidence will re-activate investment, particularly in infrastructure. But India’s overall growth prospects conceal a patchwork of economic opportunities that exist within states, districts, cities, and even towns – opportunities that companies can uncover only with careful research.
India’s economic data are promising. Annual average GDP growth is forecast to range from 6.4% to 7.7% until 2025. This compares favorably with last year’s 4.7% rate, and is close to the 7.7% average recorded in the decade up to 2012. Moreover, it contrasts sharply with the expectations of secular stagnation in the developed world. This acceleration would place India among the world’s fastest-growing large economies and increase the number of Indian consumers who can afford discretionary items from 27 million in 2012 to 89 million in 2025.
But the potential is far from uniform. According to a new report, more than half of India’s GDP growth between now and 2025 will come from just eight states (Gujarat, Haryana, Himachal Pradesh, Kerala, Maharashtra, Tamil Nadu, Andhra Pradesh, and Uttarakhand), home to just 31% of the country’s population. Along with four dynamic city-states (New Delhi, Goa, Chandigarh, and Pondicherry), these states will be home to 50 million consumers, or 57% of the country’s middle-class households.
Indeed, per capita GDP in India’s highest-performing regions could grow to twice the national level. This reflects several factors, including rapid urbanization, sustained investment in skills and infrastructure, and a shift from agriculture to industries such as automotive components, petrochemicals, pharmaceuticals, financial, and IT-enabled services.
By 2025, the economies of these regions will resemble those of middle-income countries. Maharashtra’s consumer market of 128 million will wield purchasing power similar to that now seen in Brazil. New Delhi’s 22 million people will boast living standards similar to today’s Russia.
Slightly less dramatically, though still significant, per capita GDP in Chhattisgarh, Odisha, West Bengal, Rajasthan, and Madhya Pradesh, based on current trends, is forecast to reach 0.7-1.2 times the national average by 2025, swelling the number of middle-class consumers four-fold, to 16 million. By contrast, the weakest-performing states, including Bihar, Uttar Pradesh, and Jharkhand, with per capita GDP of under 0.7 times India’s average, will struggle with low incomes and high population growth, unless they improve their governance and investment trajectory significantly.
But investors seeking the best growth opportunities will have to search beyond states’ headline figures and scrutinize India’s districts more closely, especially urban clusters and their hinterlands. We have identified 49 such high-growth clusters, located in 183 districts nationwide. In 2012, these areas accounted for half of India’s population, 70% of its GDP, and 71% of consumers. They are also home to 250 of India’s 450 cities with populations above 100,000.
Interestingly, one-third of these clusters can be found in states that have delivered low to medium economic performance, or are located close to smaller, lesser-known towns in better-performing states. The Nellore cluster in Andhra Pradesh, for example, has paddy, tobacco, groundnut, mango, and sugarcane farms. The Bikaner cluster in Rajasthan is rich in oilseed and the quarrying and production of Makarana marble and limestone. The more diversified Aurangabad cluster, in Maharashtra, is home to some of India’s largest seed companies, an active automotive, pharmaceutical, and sugar-manufacturing industry, and a tourism hub that includes the Ajanta and Ellora caves.
The location of these lesser-known clusters underscores the point that investors, seeking low-cost real estate and a skilled workforce, should look more carefully at India’s economic geography when deciding where to place their operations. These locations could eventually become knowledge-based industry or services hubs, similar to those of large Indian cities such as Bengaluru, Hyderabad, and Pune – only cheaper.
As they continue to develop, India’s dynamic economic clusters will themselves need to invest in modern sanitation and water systems, education and health, airports, railways, and road links. As such, they offer investors opportunities in many sectors, including consumer goods, financial services, housing, and infrastructure.
Given their structural advantages – including proximity to large urban centers for some – these clusters could generate some of the best returns on investment anywhere in India. Companies hoping to catch India’s next growth wave might want to consider areas that seldom feature on investment lists, but that might offer better value than marquee destinations.