The Gujarat Model’s Failure explains why the Economy has become such a significant Factor in the coming State Elections Jayati Ghosh

By now, almost everyone in the country knows that – whatever else they may or may not be able to do – one thing Narendra Modi and the team around him excel in is the art of public relations and media management. This is the reason that “the Gujarat model” of handling a state’s economy became such a major talking point in the run-up to the 2014 general elections. This model was widely projected across major media as a huge success in delivering both growth and development, even though Gujarat’s performance was at best middling among all states and in…

Shopping Frenzy in the New China C. P. Chandrasekhar

In an otherwise gloomy world economic environment, a new kind of record given the media bizarre cause to cheer: the value of online sales notched up by Chinese e-commerce giant Alibaba on a single discount sales day. Global business headlines screamed that in its annual sale on Singles’ Day, 11 November 2017, Alibaba had registered a record sales value of 168.2 billion yuan or $25.3 billion.  Singles’ Day, or 11 November, was, because of its 11/11 aspect, reportedly chosen around 25 years ago by students of Nanjing University to celebrate the fact of being single. Using what has evolved to…

How China is Managing Capital Flows – and why Jayati Ghosh

The global financial media are always on the lookout for signs of an impending financial crisis in China – and the dark prognostications about the future made by several external observers relate to both internal and external financial flows. But there are reasons to believe that both concerns may be overplayed, and that what is occurring especially with respect to cross-border flows is a much more complex process reflecting a medium-term plan of the Chinese state, in accordance with its much more assertive role in the global scene. There has been much discussion on rising internal debt levels, with analysts…

Coping with Foreign Direct Investment Jomo Kwame Sundaram and Anis Chowdhury

Foreign direct investment (FDI) is increasingly touted as the elixir for economic growth. While not against FDI, the mid-2015 Addis Ababa Action Agenda (AAAA) for financing development also cautioned that it "is concentrated in a few sectors in many developing countries and often bypasses countries most in need, and international capital flows are often short-term oriented". FDI flows UNCTAD's 2017 World Investment Report (WIR) shows that FDI flows have remained the largest and has provided less volatile of all external financial flows to developing economies, despite declining by 14% in 2016. FDI flows to the least developed countries and ‘structurally…

Neo-liberalism has been a Disaster for Nepal An Interview with Prof. C.P. Chandrasekhar

Why is neoliberalism bad for India and Nepal? What are its major flaws? Mahabir Paudyal and Prashant Lamichhane from myRepublica caught up with Professor C.P. Chandrasekhar when he was in Kathmandu last week to discuss the impact of neo-liberal economic order in the two countries, and the prospects of a socialist-oriented economy in Nepal. Nepal and India adopted liberalization almost at the same time during the 1990s. Thirty years on, what kind of impact has it had in the two countries? You need to look at liberalization at two levels. Cross-country liberalization, which is a set or package of policies implemented…

The Impact of the Saudi Coup on the World Oil Market and China Ali Kadri

While the orchestrated coup is afoot in Saudi Arabia, little attention is being paid to the potential disruption that such a fiasco may entail for the global oil markets. At the present juncture, the US’s stock of power has grown as a result of the rise to power of yet another more US-loyal and obedient Saudi prince, Mohammad bin Salman (MBS). If the tragic prince manages to survive, the US will have in place a more trigger happy and obedient anti-Iran monarch than the deposed Epicurean (what is in it for me) bunch. If he does not ascend to the…

Indian IT hits a Speed Dump C. P. Chandrasekhar and Jayati Ghosh

A sharp deceleration in growth and restricted employment expansion in the IT sector, India’s post-liberalisation showpiece, has implications beyond the industry’s boundaries. Indian_IT_Speedbump (Download the full text in PDF format) (This article was originally posted in the Business Line on November 20, 2017.)

Moody’s Upgrade Prabhat Patnaik

Credit-rating agencies, discredited by the collapse of the housing bubble in the United States when they had blithely endorsed all so-called “sub-prime lending”, are now crawling out of the woodwork, and the Indian establishment is predictably impressed by the sight. Moody’s have just upgraded India’s credit rating marginally and the BJP is beside itself with joy. Surprisingly, much of the media too have flashed the story of the upgrade as if India’s status being raised from Baa3 to Baa2 is a matter that calls for great jubilation. Now, the criteria used by finance capital for judging the performance of a…

GE’s Switch Stephen Maher

The resignation of General Electric CEO Jeff Immelt last month is the latest sign of the broad restructuring of political and economic power currently underway in the United States. His departure, and John Flannery’s arrival, reveals a lot about the new phase of financialization that has emerged from the Great Financial Crisis. As financial markets and institutions became a more important part of the economy in recent decades, so too did they take on a larger role within corporations themselves, even ostensibly nonfinancial enterprises. This fundamental reorganization of corporate power eroded the institutional foundations of the New Deal’s so-called corporate…

Not with a Bang but with a (prolonged) whimper Jayati Ghosh

It is probably obvious to everyone that global capitalism is in dire straits, notwithstanding the brave talking up of output recovery that now characterises almost every meeting of the international governing elite. Even so, discussions of the end of capitalism still typically seem overstated and futile, not least because those hoping and mobilising for bringing in an alternative system are everywhere so scattered, weak and demoralised. In effect, capitalism is the only game in town, which is why even in its current debilitated and even decrepit state, it fears no rivals. But maybe that is really not the point. Maybe…