Twenty Years after The Asian Financial Crisis Prabhat Patnaik

Exactly twenty years ago, a major financial crisis had hit the countries of East and South East Asia in July 1997. This crisis was a watershed in the history of third world development, in the sense that these “tiger economies” which had seen extraordinarily high growth rates until that time, remained permanently crippled thereafter. Just around the time that they were shaking off the effects of the 1997 crisis on their respective economies, the collapse of the “housing bubble” in the United States plunged the entire world capitalist system into a crisis which also affected them, so that they could…

RCEP: Is the mega FTA leading us into non strategy? Smitha Francis

As the 19th Round of the RCEP (Regional Comprehensive Economic Partnership) negotiations winds up in Hyderabad, India, there are many grounds for being apprehensive about the direction in which it has moved. RCEP is one of the two proposed mega free trade agreements (FTAs) aiming at greater integration in the Asia-Pacific region, the other being the Trans-Pacific Partnership (TPP). Beginning in May 2013, the RCEP negotiations are being undertaken between the ten member countries of ASEAN and its six FTA partners Australia, China, India, Japan, New Zealand and South Korea. The initiative was launched to address concerns about the ‘noodle…

Debts that cannot be paid will not be Sabri Oncu

Total global debt has increased, growth has been slowing down since the onset of the global financial crisis in 2007 and has been rapidly decelerating after 2012. This may be a sign that the world has arrived at its debt carrying capacity or has even crossed it, meaning that capitalism is probably already insolvent. Debts_that_cannot_be_paid (Download the full text in PDF format) (This article was originally posted in the Economic & Political Weekly on July 15, 2017.)

China’s Capital Flight Syndrome C.P. Chandrasekhar

China, now one of the world’s two largest nations measured by gross domestic product (GDP), is displa­ying a strange malady. A sudden and large outflow of capital from the country is resulting in a sharp fall in its reserves. Going by International Monetary Fund (IMF) statistics, between the quarter ending June 2014 and the one ending June 2016, China’s foreign exchange reserves fell by $752 billion, from $4.1 trillion to $3.3 trillion. According to recent reports, reserves had fallen further to $3.1 trillion by the end of October 2016. This collapse in reserves due to an outflow of capital is…

No Method in this Confusion C.P. Chandrasekhar

Reserve Bank of India Governor Raghuram Rajan faces a challenge greater than that confronting his peers. Having taken office when the task of dealing with the global crisis had ostensibly been done with, he cannot appeal to circumstances to defend actions that go contradictory to his professed faith. Developed country finance ministers and central bankers did that through the crisis—borrowing to spend while swearing by fiscal consolidation or pumping liquidity into the system while claiming to be committed to a monetary policy framework that makes reining in inflation its prime target. Rajan took office when many claimed the crisis was…