Global Instability and the Development Project: Is the Twenty-First Century different? Jayati Ghosh

GLOBAL CAPITALISM TODAY: UNSTABLE, MORIBUND, OR JUST RESTING? Ever since the global financial crisis of 2008–2009, the trajectory of the world economy has been hesitant, unstable and prone to many risks. Output recovery has been limited and fragile; and, more significantly, even in the more dynamic economies, it has not increased good-quality employment or reduced inequality and material insecurity. Global capitalism as an economic regime is increasingly unable to deliver on its own promise of continuous expansion within a largely stable society. Even so, discussions of the ‘end’ of capitalism still typically seem overstated and futile, not least because those…

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…

RCEP Deal can be disastrous for India Biswajit Dhar

Trade ministers of 16 countries negotiating the Regional Comprehensive Economic Partnership (RCEP) met for their crucial sixth meeting in Singapore in end-August, in an effort to create by far the largest economic integration agreement. The joint media statement issued at the end of the ministerial meeting provides some key pointers to where the negotiations are headed. The statement mentions that the ministers exchanged views on the next steps toward the conclusion of negotiations and that they adopted a package of deliverables. Although the contents of the package are under wraps, the statement says that the ministers instructed their negotiators to…

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)

Who’s manipulating China’s exchange rate? C. P. Chandrasekhar and Jayati Ghosh

A favourite trope of Northern economic policy makers – especially those in the United States – is that China systematically manipulates the exchange rate of the RenMinBi to ensure greater external competitiveness, and that this amounts to an unfair trade practice. While this has been a complaint of the US government for some years now, President Trump of the US has become a particularly strong advocate of this theory. Most recently, the recent (slight) depreciation of the Chinese RenMinBi (RMB or Yuan) relative to the US dollar has been met with howls of protest from Mr Trump and his trade…

Women’s work in India Jayati Ghosh

One of the difficulties with discussions on employment in India is the tendency to conflate employment and work. But employment is only that part of work that is remunerated, and in India a vast amount of work is actually unpaid and often not even socially recognised. Once we recognise that, a lot of what appears to be inexplicable about Indian employment trends becomes easier to understand. This is especially true of women’s work. There has been much discussion on the evidence from recent NSS large sample surveys on employment, of the significant decline in women’s workforce participation rates. The work…

India’s Electronics Manufacturing Sector: Getting the Diagnosis Right Smitha Francis

The Indian government has announced several policy measures aimed at promoting domestic electronics manufacturing as part of its “Make in India” initiative (2014). A casualty of incoherent policy regimes for nearly three decades, the electronics industry appears to be receiving some focused attention. The efforts began after the National Policy on Electronics (NPE), drafted by the Department of Electronics and Information Technology (Deity) in 2012, highlighted the abysmally low level of value addition in domestically produced electronic products, which ranged just between 5% and 10% in most cases at the time (NPE 2012). Instead, electronics manufacturers appear to prefer importing…

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…