Arming Poor Countries Enriches Rich Countries Anis Chowdhury and Jomo Kwame Sundaram

Although the Cold War came to an end over a quarter century ago, international arms sales only declined temporarily at the end of the last century. Instead, the United States under President Trump is extending its arms superiority over the rest of the world. The five biggest importers were India, Saudi Arabia, the United Arab Emirates (UAE), China and Algeria. Indian arms imports increased by 43 per cent. Its imports during 2012–2016 were far greater than those of its regional rivals, China and Pakistan, as Pakistan’s arms imports declined by 28 per cent compared to 2007–2011. UAE imports increased by…

Do Purchasing Power Parity exchange rates mislead on incomes? The case of China C.P. Chandrasekhar and Jayati Ghosh

Ever since Larry Summers and Alan Heston produced what become known as the “Penn World Tables” comparing prices and thereby the purchasing power of currencies across countries, the urge to use some deflator of market exchange rates to compare incomes across countries has been strong. The economic theory behind this is that exchange rate comparisons of less-developed economies consistently undervalue the non-traded goods sector, especially labour-intensive and relatively cheap services, and therefore underestimate real incomes in these developing economies. In some cases, this can be quite significant. In larger emerging markets like China and India, the conversion factors have been…

Shopping Frenzy in the New China C. P. Chandrasekhar

In an otherwise gloomy world economic environment, a new kind of record given the media bizarre cause to cheer: the value of online sales notched up by Chinese e-commerce giant Alibaba on a single discount sales day. Global business headlines screamed that in its annual sale on Singles’ Day, 11 November 2017, Alibaba had registered a record sales value of 168.2 billion yuan or $25.3 billion.  Singles’ Day, or 11 November, was, because of its 11/11 aspect, reportedly chosen around 25 years ago by students of Nanjing University to celebrate the fact of being single. Using what has evolved to…

How China is Managing Capital Flows – and why Jayati Ghosh

The global financial media are always on the lookout for signs of an impending financial crisis in China – and the dark prognostications about the future made by several external observers relate to both internal and external financial flows. But there are reasons to believe that both concerns may be overplayed, and that what is occurring especially with respect to cross-border flows is a much more complex process reflecting a medium-term plan of the Chinese state, in accordance with its much more assertive role in the global scene. There has been much discussion on rising internal debt levels, with analysts…

Coping with Foreign Direct Investment Jomo Kwame Sundaram and Anis Chowdhury

Foreign direct investment (FDI) is increasingly touted as the elixir for economic growth. While not against FDI, the mid-2015 Addis Ababa Action Agenda (AAAA) for financing development also cautioned that it "is concentrated in a few sectors in many developing countries and often bypasses countries most in need, and international capital flows are often short-term oriented". FDI flows UNCTAD's 2017 World Investment Report (WIR) shows that FDI flows have remained the largest and has provided less volatile of all external financial flows to developing economies, despite declining by 14% in 2016. FDI flows to the least developed countries and ‘structurally…

The Impact of the Saudi Coup on the World Oil Market and China Ali Kadri

While the orchestrated coup is afoot in Saudi Arabia, little attention is being paid to the potential disruption that such a fiasco may entail for the global oil markets. At the present juncture, the US’s stock of power has grown as a result of the rise to power of yet another more US-loyal and obedient Saudi prince, Mohammad bin Salman (MBS). If the tragic prince manages to survive, the US will have in place a more trigger happy and obedient anti-Iran monarch than the deposed Epicurean (what is in it for me) bunch. If he does not ascend to the…

Early Death in Russia Vladimir Popov and Jomo Kwame Sundaram

The transition to market economy and democracy in the Russian Federation in the early 1990s dramatically increased mortality and shortened life expectancy. The steep upsurge in mortality and the decline in life expectancy in Russia are the largest ever recorded anywhere in peacetime in the absence of catastrophes such as war, plague or famine. During 1987-1994, the Russian mortality rate increased by 60%, from 1.0% to 1.6%, while life expectancy went down from 70 to 64 years. Although life expectancy declined from 1987, when Mikhail Gorbachev was still in charge, its fall was sharpest during 1991-1994, i.e., during Boris Yeltsin’s…

Jayati Ghosh speaks on ‘The complexities of success: Globalisation, inequality and economic insecurity in China and India’

Despite being the biggest beneficiaries of the recent phase of globalisation, India and China show rising inequalities, greater fragility and insecurity of material life for a significant section of the population. As well as environmental crises, insufficient employment generation and looming demographic challenges. Growth trajectories that have increased and relied upon inequalities of different kinds breed the invisible discontents of globalization.

China’s Labour Market Conundrum C.P. Chandrasekhar and Jayati Ghosh

Has China's labour market reached a point where long years of high growth have led to demand outstripping supply, resulting in a sharp rise in wages? China_Labour (Download the full text in PDF format) (This article was originally published in the Business Line on July 4, 2017.)

One Belt, One Road, One Grand Design? Jayati Ghosh

It is a truism of history that rising powers tend to be the ones valorising “free” trade and more open and integrated national economies, just as waning powers tend to turn inwards. So it is no surprise that over the past half year, as the United States elected a President with an avowedly protectionist agenda (even if relatively little has been acted upon so far), China’s President has become the chief advocate of globalisation and more extensive trade and investment links across countries. This drumbeat reached a crescendo in mid-May 2017, at a summit in Beijing to celebrate the official…