The Modi government, the RBI governor and the mess that is the Indian economy Jayati Ghosh

The sheer ineptitude of economic policymaking under prime minister Narendra Modi’s government has been evident from almost the beginning of its tenure. What is also now well-established is the aggressive and rigid approach of the political leadership, which generally pushes its own (often hare-brained) policies regardless of the views of experts and the wider impact on ordinary people, both of whom it tends to treat with disdain. Surely, any of the economic advisors and others in significant positions of economic policymaking would have known all this for some time now. Any self-respecting central bank governor (or indeed anyone described as…

Multilateralism Undermined by Globalization’s Discontents Anis Chowdhury and Jomo Kwame Sundaram

On 24 October 1945, the world's most inclusive multilateral institution, the United Nations, was born to "save succeeding generations from the scourge of war, ... reaffirm faith in fundamental human rights, … establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and to promote social progress and better standards of life in larger freedom" (UN Charter: Preamble). Thus, one major purpose of the UN is to foster international cooperation to resolve the world's socio-economic problems and to promote human rights and fundamental freedoms (UN Charter: Article 1.3).…

On taking sides in the RBI-Government stand-off C. P. Chandrasekhar

Unlike in the worlds of business and politics, there is little scope for gossip in the world of economics. So, when multiple signals suggested that that there was a stand-off between the government and the Reserve Bank of India (RBI), the media made the most of it, with a multitude of stories reporting and explaining the nature of the spat and its implications. Given the formal economic arguments that must enter those discussions, there is much that the lay reader cannot process to assess which of the two institutions is right in this controversy. However, the thrust of the reportage…

Vilifying the Intelligentsia Prabhat Patnaik

Narendra  Modi said the other day, rather disparagingly, that the “Urban Naxals” live in air-conditioned comfort. Since all who speak or write in public upholding the right to dissent from the Hindutva positions, including even known critics of the Left, which means virtually all members of the intelligentsia who display any integrity, have been dubbed “Urban Naxals” by his government, his remark in effect amounts to targeting the entire intelligentsia. His remark constitutes an utterly crude attempt to delegitimise any intellectual position that is unpalatable for the government, by suggesting that those who hold such positions live in comfort and…

Inequality undermines democracy Jomo Kwame Sundaram and Anis Chowdhury

Economic inequality – involving both income and wealth concentration – has risen in nearly all world regions since the 1980s. Gross economic inequalities moderated for much of the 20th century, especially after World War Two until the 1970s, but has now reached levels never before seen in human history. No more inclusive prosperity The World Inequality Report 2018 found that the richest 1% of humanity captured 27% of world income between 1980 and 2016. By contrast, the bottom half got only 12%. In Europe, the top one percent got 18%, while the bottom half got 14%. OXFAM's Reward Work, Not…

The Modi Government’s spat with The RBI Prabhat Patnaik

The Modi government’s spat with the Reserve Bank of India, like its sudden resurrection of the Ram temple project, indicates the desperation it feels at its dwindling electoral appeal. Having dealt a huge blow to the small-scale sector through its measures like demonetization and the GST, having aggravated through its inaction the impact on the Indian economy of the world capitalist crisis, and of Trump’s protectionism that has followed, it is now quite desperate to salvage some support for itself as the Lok Sabha elections approach. Since mere grandiose announcements such as Ayushman Bharat or doubling agricultural incomes can no…

Lessons for the ‘Rest’ from ersatz miracles Jomo Kwame Sundaram

Of the ten fastest growing economies since 1960, eight are in East Asia. Two main competing explanations claimed to explain this regional concentration of catch up growth since the late 20th century, often referred to as the East Asian miracle. The dominant ‘neo-liberal' Washington Consensus, sought to establish minimalist ‘night-watchman' state, attributed this exceptional regional performance to macroeconomic stability, public goods provision, and openness to trade and investment. Meanwhile, more heterodox economists focused on the need for states to adopt pragmatic, experimental ‘trial and error', selective approaches to overcome market and coordination failures in order to accelerate growth, especially through…

The Government-RBI Stand-Off Prabhat Patnaik

The stand-off between the Modi government and the Reserve Bank of India has generated a false discourse on the one hand and an illusion on the other. In this discourse the RBI’s position, articulated  by its Deputy Governor, is that central bank policy has to be guided by financial markets rather than by a government headed by politicians with electoral compulsions and “populist” agendas. This is obviously an  undemocratic position, for it amounts to saying that crucial decisions affecting people’s lives should be outside their sphere of intervention through the electoral process. It is also a dangerous position, since financial…

Bracing for the Bust C.P. Chandrasekhar

The message from the October meetings of the International Monetary Fund (IMF) and the World Bank, which normally exude optimism, is glum. In January this year, the IMF noted that “the cyclical upswing under way since mid-2016” was growing stronger, contributing to “the broadest synchronised global growth upsurge since 2010”. It now feels that while “the global economic expansion remains strong”, it has “become less balanced and with more downside risks”. This does not just mean that one more sighting of the “green shoots of recovery” is proving to be premature. Given the IMF’s predilection for underplaying bad news, it…

Did post-Soviet Russians drink themselves to death? Jomo Kwame Sundaram and Vladimir Popov

Although initially obscured by The Economist, among others, the sudden and unprecedented increase in Russian adult male mortality during 1992-1994 is no longer denied. Instead, the debate is now over why? Having advocated 'shock therapy', a 'big bang', 'sudden' or rapid post-Soviet transition, Jeffrey Sachs and others have claimed that the sudden collapse in Russian adult male life expectancy was due to a sudden increase in alcohol consumption, playing into popular foreign images of vodka-binging Russian men. In fact, the transition to the market economy and democracy in Eastern Europe and former Soviet republics dramatically reduced life expectancy owing to…