In the Name of the South: India’s aggressive economic diplomacy C. P. Chandrasekhar
India’s government has since the year of its G20 Presidency claimed to have restored the country’s role as the ‘Voice of the South’ in global dialogues. That is often backed up by reference to its efforts to focus attention on the problem of debt stress and default in poor developing countries, and to the induction of the African Union into the G20. Third World ‘leadership’ is being won by building solidarity among less developed countries is the argument. But recent episodes suggest that in practice that may not be what India is managing to achieve. One such episode occurred at…
On the Fuss over US Interest Rates C. P. Chandrasekhar and Jayati Ghosh
Recent discussions on economic policy in the US and other high-income nations make it appear that there is only one domain and one instrument that really matter: monetary policy and interest rates. Whether on the eve of meetings of the US Fed’s monetary policy committee, or in the interregnum between meetings, economic policy discussions largely focus on whether the Fed would begin cutting rates; whether the expectations of “the markets” on the likelihood of those cuts and their magnitude will be met; and whether investors have “factored” in the likelihood that those cuts would or would not occur. It is…
Subtle War at the WTO C. P. Chandrasekhar
At the time of writing, the 13th ministerial meet of the World Trade Organisation (WTO) is under way in Abu Dhabi. Among the many issues that are being discussed are two of concern for less developed countries generally and India in particular. The first relates to the renewal of a moratorium on imposition of trade taxes on digital services identified as “electronic transmissions”. The second concern is that of finding a permanent solution to the issue of public stockholding of food, or the legality under WTO rules of measures to procure at administratively prescribed, ‘non-market’ prices of food to be…
Federal Fracture: A nation in crisis C. P. Chandrasekhar
Indian federalism is on the verge of breakdown. Ministers from opposition-ruled States have taken to the streets in New Delhi to protest against discrimination by the Centre. And the Prime Minister, who leads the use of a divisive majoritarian agenda for political gains, has attacked the protestors saying they are breaking up the country by using the narrative of a North-South divide for political purposes. The fact is that opposition parties leading state governments are under siege. Central agencies are being used to scare and incarcerate State level opposition party leaders. Central directives and schemes are being used to undermine…
Maldives: Debt and dependence C. P. Chandrasekhar and Jayati Ghosh
As the distance between Maldives and India widens, with the latter being asked to withdraw its uniformed personnel stationed in the former, questions are being asked about how Maldives will manage without India’s help on the economic and regional security fronts. As if echoing that sentiment, in Article IV consultation reports following the COVID pandemic year 2020, the IMF has been underlining the country’s vulnerability to external and overall debt distress. The Maldivian President Mohamed Muizzu, who won an election his party fought on an anti-India platform, appears convinced that with Chinese support he can do without India. He clearly…
Distress and Displacement in Times of War C. P. Chandrasekhar
Recruitment drives held over the last week of January, in Lucknow in Uttar Pradesh and Rohtak in Haryana, for Indian workers to undertake construction and caregiver jobs in Israel have captured global attention. Thousands of job aspirants, who had either registered online or just walked in for interviews, were seen as vying for 10,000 advertised positions to be filled in each of these locations. Promised a salary in excess of Rs. 1,30,000 a month plus perks varying from a small bonus to free accommodation, the applicants are willing to ignore the risks associated with migrating to a country engaged in…
The IMF and the Argentinian Right C. P. Chandrasekhar
On January 10, the IMF announced its decision to release $4.7 billion out of a $57 billion bailout package sanctioned in 2018 to perennially debt-distressed Argentina, then under a right-wing government headed by Mauricio Macrio. That surprised some. Going by the IMF’s stated ‘principles’, the disbursal should not have occurred because the country had failed to meet the conditions and targets specified by the lender for continuation of the programme. Besides, the $4.7 billion reflected not only the delayed release of a $3.3 billion tranche that was due last November, but also the release in advance, or ahead of schedule,…
World Economy: Out of control C. P. Chandrasekhar and Jayati Ghosh
Early in 2024, the World Bank in its flagship report Global Economic Prospects, put out a message of gloom. This year could end marking “a wretched milestone: the weakest global growth performance of any half-decade since the 1990s”. Between 2021, when the world economy showed signs of recovering from the troughs of the pandemic, and 2023, growth has been decelerating almost everywhere, with the figures at 6.2, 3.0 and 2.6 per cent for the world as a whole in 2021, 2022 and 2023 respectively (Chart 1). For most advanced economies growth in 2023 was below the average recorded during the…
Lessons from a Zambian Stand-off C. P. Chandrasekhar
The recent collapse of the protracted negotiations to restructure Zambia’s external debt, following a default in November 2020, underlines the failure of the prevailing international financial architecture to address global challenges. Not only has the structure not been adapted to the realities of a changing international order, but it binds the less developed countries into accepting the IMF as the principal agent to manage balance of payments difficulties and address debt stress, on behalf of both creditors and debtors. But the claim of the IMF to being a neutral arbitrator has long been in question. The Zambian experience suggests that…
Another COP-out C.P. Chandrasekhar and Jayati Ghosh
Following the COP28 Summit, there is an attempt to establish that the conference was a significant step forward in the effort to address the causes and consequences of climate change. However, a reading of the actual outcome only illustrates how the resistance of the developed countries to own up to their historical responsibility as emitters is stalling the effort to combat climate change and manage the consequences of the changes already underway. The COP process is ostensibly concerned with the global effort to move from an unsustainable trajectory to an acceptable one in terms of the ceiling on long-term warming…