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…

Southeast Asia: From Miracle To Debacle Jomo Kwame Sundaram

The World Bank and other influential international financial institutions and development agencies have been touting Southeast Asian (SEA) newly industrializing countries as models for emulation, especially by African developing countries seeking to accelerate their development transformations. But these recommendations are usually based on misleading analysis of their rapid growth and structural transformation. Sub-regional differences Typically, various cultural and other justifications are offered to justify recommending SEA, rather than Northeast Asia (NEA), as the better sub-region for emulation. Consequently, important lessons from East Asian experiences have been misrepresented, drawing erroneous lessons from the region's undoubtedly impressive economic performance during its high…

Most Financial Inflows Not Developmental Jomo Kwame Sundaram and Anis Chowdhury

Recent disturbing trends in international finance have particularly problematic implications, especially for developing countries. The recently released United Nations report, World Economic Situation and Prospects 2017 (WESP 2017) is the only recent report of a multilateral inter-governmental organization to recognize these problems, especially as they are relevant to the financing requirements for achieving the Sustainable Development Goals (SDGs). Resource outflows rising Developing countries have long experienced net resource transfers abroad. Capital has flowed from developing to developed countries for many years, peaking at US$800 billion in 2008 when the financial crisis erupted. Net transfers from developing countries in 2016 came…

Changing the Investment Policy Menu Smitha Francis

The WIR rightly focussed on the interactions between national investment policymaking and international agreements. But its investment policy reform agenda remains incomplete. Changing_Investment_Policy  (Download the full text in PDF format) (This article was originally published in the Economic and Political Weekly, Vol. XLVIII, No. 05, February 02, 2013.)

India’s External Sector C.P. Chandrasekhar and Jayati Ghosh

Even before global currents caused relatively rapid outflows of mobile finance capital from India, the Indian economy was vulnerable on the external front. The recent pattern of growth that has been reliant on capital inflows to generate domestic credit-driven bubbles, rather than trade surpluses is not sustainable and puts the economy at greater risk. External_Sector (Download the full text in PDF format) (This article was published in the Business Line on January 9, 2012)

Multinational Retail Firms in India Jayati Ghosh

The Indian government’s sudden decision to allow hitherto prohibited foreign direct investment in multi-brand retail as well as full ownership in single-brand retail generated huge public outcry, to the extent that the government was forced to pause. One important ally of the government, fearing for her own popularity in the state of West Bengal where she is currently Chief Minister, declared that the policy is temporarily “on hold”, to be greeted with only awkward silence from the government. Finally the government was forced to announce that the policy is to be kept on hold until “consensus” is achieved, which certainly…

Knowledge Economies in India and China: Challenges and prospects in pharmaceuticals and biotechnology Jayan Jose Thomas

Based on an analysis of the pharmaceuticals and biotechnology industries, this paper examines the challenges and prospects to innovation in China and India, in the context of globalization of R&D and the evolution of the post-TRIPs intellectual property regimes in these two countries. It is argued that rather than competing with each other by cutting wage costs, India and China need to initiate strong policy measures to counter the negative effects of globalization of R&D and join hands to take the lead in developing products of innovation that would benefit the third world. pharmaceuticals_biotechnology (Download the full text in PDF…

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