Another Global Financial Crisis for Developing Countries? Anis Chowdhury and Jomo Kwame Sundaram

George Soros, Bill Gates and other pundits have been predicting another financial crisis. In their recent book, Revolution Required: The Ticking Bombs of the G7 Model, Peter Dittus and Herve Hamoun, former senior officials of the Bank of International Settlements, warned of ‘ticking time bombs' in the global financial system waiting to explode, mainly due to the policies of major developed countries. Recent events vindicate such fears. Many emerging market currencies have come under considerable pressure, with the Indonesian rupiah, Indian rupee and South African rand all struggling since early this year. Brazil's real fell sharply in June, and Argentina…

The larger crisis that NPAs signal C. P. Chandrasekhar

Having overcome a legacy of extreme shortage of supply, India’s power sector is in the midst of a crisis with ramifications of a wholly different kind. The crisis arises because firms accounting for significant proportion of power sector assets have defaulted on their debt servicing commitments, and banks are not able to find ways of restructuring that debt or recouping their money. So the RBI’s guidelines requires that the assets should be liquidated to recover whatever is possible and compensate banks from which these firms had taken loans and then defaulted. But the assessment is that liquidation would yield the…

The State of the Indian Economy Jayati Ghosh

Only the blind or the foolhardy would claim that the Indian economy is in good shape. Despite the government’s obsession with high GDP growth – according to which the Indian economy is doing not just reasonably well but is among the best performers in the world – the fault lines are now only too evident: the external fragilities, the internal imbalances, the crisis in agriculture, the lack of employment opportunities, the rising inequality and the growing insecurity of material life for the majority of the population. Indeed, these problems are now so intense that they are clearly evident in plain…

Great Recession, Greater Illusions Anis Chowdhury and Jomo Kwame Sundaram

In 2009, the world economy contracted by -2.2%. Growth in all developing countries declined from around 8% in 2007 to 2.6% in 2009 as the developed world contracted by -3.8% in 2009. The collapse of the Lehmann Brothers investment bank in September 2008 symbolized the US financial crisis that triggered the Great Recession of 2008-2009. Demise of Keynesian consensus In its immediate aftermath, a new consensus reversed the neoliberal Washington Consensus of the last two decades of the 20th century. Proclaimed by the G20's London Summit of 2 April 2009, it envisaged return to Keynesian macroeconomic policies, including large-scale fiscal…

The Real Problem with Free Trade Jayati Ghosh

Even if free trade is ultimately broadly beneficial, the fact remains that as trade has become freer, inequality has worsened. One major reason for this is that current global trade rules have enabled a few large firms to capture an ever-larger share of value-added, at a massive cost to economies, workers, and the environment. For full article click here (This article was originally published in the Project Syndicate on September 10, 2018)

Revisiting Privatization’s claims Jomo Kwame Sundaram

Several arguments have been advanced to justify privatization since the 1980s. Privatization has been advocated as an easy means to: Reduce the government's financial and administrative burden, particularly by undertaking and maintaining services and infrastructure; Promote competition, improve efficiency and increase productivity in providing public services; Stimulate private entrepreneurship and investment to accelerate economic growth; Help reduce the public sector's presence and size, with its monopolistic tendencies and bureaucratic support. Moot case for privatization First, privatization is supposed to reduce the government's financial and administrative burdens, particularly in providing services and infrastructure. Earlier public sector expansion was increasingly seen as…

In Memoriam: Samir Amin

IDEAs network mourns the loss of the celebrated Marxist thinker Samir Amin, who was also a Member of our Advisory Board. Samir Amin’s razor-sharp intellect, penetrating analysis, strong anti-imperialism and conviction in the importance of third world solidarity as well as his deep and continuous commitment to progressive causes around the world, will continue to remain an inspiration for us. We publish below an obituary by Prabhat Patnaik, Jayati Ghosh and C.P. Chandrasekhar. Samir Amin (1931-2018) A Marxist from the Third World C. P. Chandrasekhar 1 September 2018 Samir Amin, a leading social thinker, campaigner and activist of and for…

Emergency 2.0 Jayati Ghosh

For many Indians, the period of the Emergency in the mid 1970s represents the blackest period for Indian democracy since Independence. As a student at University during that time, seeing the repression and fear all around and knowing some of the people who were imprisoned or otherwise persecuted for their views, I too shared that view – until very recently. Because what is happening now in India is in many ways is just as bad, and in some respects significantly worse. Just as during the Emergency, we have the arms of the state and its security powers used to intimidate…

Pakistan: Who needs a crisis? C.P. Chandrasekhar

With Imran Khan’s Pakistan Tehreek-e-Insaaf (PTI) or “Movement for Justice” winning 116 of the 272 seats filled through election in Pakistan’s National Assembly, the former cricketer is set to be installed as his country’s next Prime Minister. So attention has now shifted to how he would address the  ‘crisis’ the country faces. That crisis is not a crisis of growth. Pakistan has registered year-on-year growth rates exceeding 5.4 per cent in the three consecutive years ending financial year 2017-18, a record matched this century only in the globally-synchronised, high growth years 2003-2007. Nor could it be identified as a crisis…

Finance versus The People Prabhat Patnaik

Sometimes even a tiny news-item can reveal volumes about capitalism. The Indian stock market, as is well-known, is booming at present: the 30-share Sensex closed at a new high of 38,278.75 on Monday the 20th of August, and the broader-based Nifty crossed the 11500 mark for the first time on the same day. One of the financial sector executives explained the reason behind this boom as follows (The Hindu, Aug.21): “The only difference between now (versus a few months back) is that politics looks more stable---prospects of an Opposition coalition are looking a little shaky”. These financial sector executives know…