Economic Times 2007

102.  A triumph of Reforms

101.  Rise of Billionaires: Threat to Growth?

100.  Inequality and Reforms

99.  Political Economy of Reforms in India

98.  Mumbai: Self-inflicted Wounds

97.  Agriculture, The Final Frontier?

96.  A Letter to Chief Minister Mayawati

95.  Rough Road Ahead for Free Trade _____________________________________________________________________________________

Economic Times 2006  

94.  Is India Flying?  Is the current growth in India we observe represent a business cycle effect or the country has shifted to a higher growth path?  I argue that it is the latter. 

93.  Inequality or interest-group politics?: Professor Pranab Bardhan of the University of California at Berkeley has recently resurrected inequality as the key explanation for the impasse on the reforms (Financial Times, August 8, 2006).  Is his claim right? At least as a general proposition, the link between inequality and the ability to implement reforms is highly tenuous.

92.  Don't rush into full capital-account convertibility (with Purba Mukerji): Tarapore Committee-II on capital account convertibility is due to table its report on July 31, 2006. Tarapore Committee-I, also appointed at the urging of Mr P Chidambaram during his first tenure as the finance minister, had recommended full convertibility within three years, ending 1999-2000 with specific goal posts adopted. The Asian financial crisis sealed the fate of that recommendation but the FM has once again revived the issue. We offer five reasons why India should not rush into convertibility

91a.  A historic opportunity for India (with Jagdish Bhagwati): With the Doha Round at a critical juncture, India has a historic opportunity to seize the leadership role in bringing the Round closer to a successful conclusion. Such an initiative promises to place India among key players on the world stage as it seeks the Indo-US nuclear deal and a permanent seat on the Security Council.

91.  Pro-market reforms and growth: The embrace of pro-market reforms by the Left Front government of West Bengal notwithstanding, anti-reform scholars continue to express skepticism towards them. Distinguished Princeton political scientist Atul Kohli has fired the latest shot on their behalf.

90.  India and China as Exporters: not in the same league: On GDP growth, India seems to be bridging the gap with China.  But in the world markets, the story is dramatically different.

89.  Graft or not to graft growth: The fight against corruption is surely a worthy cause on moral grounds. But the case for turning it into the principal instrument of development policy rests on much weaker foundation. 
The claim by Wolfowitz in the speech in Indonesia that corruption is 'one of the biggest threats to development in many countries' is just as hard to substantiate as the assertion by his predecessor, James D Wolfensohn, that rich country subsidies constitute the most important barriers to the development of the poorest countries

88.  Venturing into Freakonomics: The recent best seller titled Freakonomics by Steven Levitt, winner of 2003 Clark Medal awarded to the best American economist below forty years, has sparked the interest of economists in providing surprising explanations of the phenomena observed in everyday life.  This column is about a similar surprising explanation of a relatively recent experience.

87.  Focus on equity can hamper poverty reduction: In their reply (Dec 23, 2005), WDR authors Francisco Ferreira and Michael Walton question my critique. Among other things, they point out that whereas the WDR 2006 is concerned with equality of opportunity, my critique focused on equality of income. This is puzzling since the bulk of my critique focused on policies that impact opportunities directly, not just through income.

86.  Free-trade skeptics: Wrong again: Thanks to a handful of vocal free-trade skeptics among economists, pro-free-trade economists never have to fear being rendered redundant. In a recent article in The Guardian (December 12, 2005), Larry Elliott writes that according to Harvard economist Dani Rodrik, the experiences of Vietnam and Mexico illustrate why liberal trade policies contribute precious little to economic prosperity.  But like the other arguments against trade liberalisation by Rodrik, this one also appears plausible at first sight but collapses in the face of careful scrutiny

Economic Times 2005

85.  Hailing Hong Kong, completing Doha: Contrary to the doom and gloom scenarios advanced by many, the WTO ministerial conference at Hong Kong concluded successfully on December 18, 2005, making significant progress towards completing the Doha Round. True, the conference did not produce dramatic results. But that was just as some among us had predicted: with the final round of negotiations still a year away, few accomplished negotiators could be expected to put their best offers on the table.

84.  Salvaging the Doha Agricultural Talks: The assertion that the removal of agricultural subsidies by rich countries would benefit the LDCs is false. And telling the rich nations that their policies hurt the LDCs would not produce the desired outcome.

83.  Another Year, Another Development Formula from the World Bank: Entitled "Equity and Development," the World Development Report (WDR)2006 of the World Bank is a great leap backward in development thinking. Ignoring the lessons of 50 years of experience, it advocates bringing equity to the center stage of development-policy making.  The report is not oblivious to the fact that virtually all agree that the central goal of development policy should be to tackle poverty, not inequity

82. The Challenge before Pascal Lamy: Substnative liberalization under the Doha Round is possible but not without developing countries making reciprocal concessions.

81.  Tax Hike or Expenditure Cut?: Most analysts agree that India must urgently bring its gigantic fiscal deficit down. The real question  is how precisely to do it: through tax hike or expenditure cut?  The two remedies have very different effects on aggregate savings and therefore  investment.

80.  Indophobia: Facts versus Fiction: US academics, journalists and entrepreneurs as also visiting senior officials from India have fed the  American fears that Indians (and Chinese) are coming in large hordes to take away American jobs.  Are they right?

79. Alas, There is no Free Lunch: Recently, the Finance Minister said the investment boom was leading to large trade deficit and he wants to cure it by opening the floodgates of foreign investment.  But the minister got it exactly wrong: if increased foreign investment is to finance the domestic investment, the current account deficit MUST rise!  It is simply a matter of understanding the savings-investment and balance-of-payments identities.

78. Why fiscal deficits spell crises: The combined fiscal deficit of the centre and the states in India has been running at around 10% of the GDP since 1999. India has also accumulated a large public debt that stands between 80 and 85% of the GDP currently. These facts have led many to suggest that India may be heading towards another macroeconomic crisis.

77. An India-China Free Trade Area?: The case for an India-China FTA is based principally on its strategic value. During the last decade, with the creation of the NAFTA, several expansions of the EU and a host of smaller FTAs in Latin America, Asia has suffered from a diversion of these regions' trade away from it.  One response to this trade diversion for Asia would be to move towards a bloc of its own.  Such a bloc may give Asia the necessary leverage to pry open the NAFTA and EU blocs to outsiders through multilateral liberalization.

76. Farm liberalisation will hurt LDCs: While the overall costs of agricultural protection and subsidies in the rich countries fully justify their dismantling, the policy discourse on the subject has suffered from deliberate obfuscation, with political correctness rather than economic logic driving it.

75. Surrender to multinationals: India is about to lose on the home front what it had won in Geneva--its Patent Ordinance gives pharmaceutical multinationals what the United States had failed to win for them at the negotiating table.

74. Reform the Top Civil Service: In India, under the Parliamentary system, the Cabinet must be selected from among the Members of Parliament who, for the most part, are career politicians.  As such the chances that experts will hold the Cabinet positions are negligible.  This fact places the top-level bureaucracy in India in an enormously privileged position: most Cabinet members look to their secretaries for guidance when it comes to policymaking.  Under such circumstances, if the secretaries and those immediately below them also happen to lack the necessary expertise, we run the risk of blind leading the blind.

73. Muddles on Forex for Infrastructure: The best economists of India, both inside and outside the government, are locked in a fierce debate on the proposal for swapping infrastructure for foreign exchange reserves, put forth by the Planning Commission. A key concern raised in the debate is that dollars can be spent only on imports while infrastructure largely requires the acquisition of domestic resources. Careful analysis reveals, however, that at least this concern is without foundation: the import intensity of infrastructure is virtually irrelevant to the final outcome!

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Economic Times 2004

72. Get set to weave history: India stands on the threshold of a historic opportunity to accelerate the growth of manufacturing. Textiles and clothing account for nearly 40% of India's manufacturing output. And the time for giving this highly labour-intensive sector a major push has never been better.  Will Dr. Singh's government seize the opportunity?

71. Are we spinning the right yarn?: The quota regime that has governed the exports of textiles and clothing from developing countries to the United States, European Union (EU) and a few other developed countries for nearly four decades will meet its demise on January 1, 2005. Is India ready to capture a much larger share of exports to these markets?

70. Bipartisan Predicament: Few proponents of reforms had thought that in a controversy between the Planning Commission deputy chairman Montek Singh Ahluwalia who symbolises pro-market reforms and the Left that abhors them, they could side with the latter. Yet, sadly, that is where some of us find ourselves in the controversy over the appointment of foreigners and employees of multilateral institutions to the consultative groups of the Planning Commission

69. Kelkar's Balancing Act: Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires that the revenue deficit be eliminated entirely and fiscal deficit be reduced to 3% of the GDP by 2008-09.  The Act also requires that each year the revenue deficit be reduced by 0.5% of the GDP and fiscal deficit by 0.3% of the GDP until the final 2008-09 target is reached.  How can this be achieved?  The recent report of the Kelkar taskforce offers a roadmap.

68. Moving Trade Policy Forward: The Union commerce and industry minister, Mr Kamal Nath, scored an important victory in Geneva last month. must now build on his success by further reforming India’s trade regime. The National Foreign Trade Policy, due on 31 August, offers an excellent opportunity to accomplish this objective. The policy must pay particular attention to two issues — export subsidies and anti-dumping.

67. It's the human face, not scar face: The view that the reforms since 1991 — whether implemented by the Congress, United Front or NDA — neglected the poor, agriculture and education has gained near universal currency inside the UPA government. Even the reformists within the government have publicly complained that the policies pursued during the 1990s lacked the human face. This ‘demonisation’ of reforms not only distorts facts, it also endangers growth that is essential for poverty alleviation.

66. Goodbye to Double-Digit Growth Rate: Some of the most important reforms have been shelved and many bad policy proposals are being floated in the name of reform, dimming the prospects for double-digit growth under the present government.

65. Reforms do have a human face: Politicians seeking limelight have focused disproportionately on the achievements in the information technology sector, fuelling the impression that reforms have helped only a blessed few. But this is a gross distortion of the true picture.

64. Flirting with Nationalization: The recent episode of the flirtation by the ministry of finance with the idea of effectively nationalising the Infrastructure Development Finance Corporation (IDFC), resignations by seven senior executives of the corporation in response, and the subsequent backtracking by the ministry offers an unusual glimpse of the vestiges of the pre-reform-era thinking in the ministry

63. Outsourcing: The Culprit for Jobless Recovery?  Some influential politicians in the United States are advocating policies that threaten to repeat the mistake made by India nearly two decades ago. They argue that outsourcing is behind the massive losses of white-collar jobs in the US and would like to impose restrictions on it. But the argument is flawed.

62.  Escaping the low-investment trap: While interest rates have declined dramatically recently, private investment has remained stagnant. Why and how do we get out of this trap?

61.  What price free-trade agreements?  India is moving aggressively toward signing FTAs.  Is this the right road?

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Economic Times 2003

60.  Have the reforms failed India?: Distinguished economists Bradford DeLong of the University of California , Berkeley and Dani Rodrik of Harvard University separately argue that reforms cannot be credited with India ’s high growth rates in recent years because the shift in the growth rate preceded the reforms of the 1990s. In a related but slightly different vein, economist Joseph Stiglitz contends that India is one of the two most impressive economies today (the other being China ) and that India also, like China , has bought the least into the globalisation story that the IMF and others are selling.  Are these right claims?

59.  Is the Indian miracle inevitable?: Can the lower interest rates, favorable demographic transition and home-grown multinationals really deliver the Indian miracle?  Happy dreams...

58. A Godsend for Developing Countries: What does WTO really do to be decried as the "World Terrorist Organization" by a rally supported by three former Prime Ministers of India?

57.  If this is success, what will be failure?  India's role in the WTO negotiations has turned less negative but it has some ways to go.

56. l'affaire cola: When NGOs operatre in their areas of expertise, they can force important policy debates and policy changes in democratic countries in not just developed but also developing countries.  Here is a beautiful example from India

55. The Macroeconomy & Policy Change: Given India's success in achieving macroeconomic stability during the last half century, it is ironic that the study of macroeconomics in India has lagged far behind that of microeconomics.  For this reason alone, the recent volume Macroeconomics and Monetary Policy: Issues for a Reforming Economy, edited by M. S. Ahluwalia, Y. V. Reddy and S. S. Tarapore, honoring Chakravarti Rangarajan, the first academic economist to serve as the Governor of the Reserve Bank of India and a much-admired figure among Indian economists and policy makers, is a useful addition to literature on economic reforms in India.

54.  Adopt a Single, Uniform Tariff Rate: The exisitng trade policy commitment in a previous budget speech is to unify tariff rates around two rates of 20 and 10 percent starting 2004-05.  But why not adopt a single, uniform rate of 15 percent instead?

53. Free-trade Skeptics: Skeptics After All?: Do free-trade skeptics such as Joseph Stiglitz and Dani Rodrik recommend protection?  Not really, if you read carefully.

52.  Without Trade Openness, There is no Sustained Growth: So trade openness is not sufficient for growth.  But can you do without it?  And are there autarkies or near autarkies in the developing world that have rapidly reduced poverty?

51.  How to break the TRIPS impasse?: The negotiations on how to allow poor countries to take advantage of the compulsory licensing provision of the TRIPS Agreement are at an impasse.  But there is a way to break the logjam.

50. Your Move, Mr. Jaitley!: The United States has proposed that all tariffs on non-agricultural goods be reduced to 8 percent or less by 2010 and to zero rate by 2015.  This offers India a gloden opportunity to either make a huge economic gain or win a major tactical victory.  But will Arun Jaitley, India's new Commerce Minister act?

49. Diwan-e-Khas to Diwan-e-Aam: Policy changes in India are no longer by stealth. Indeed, Kelkar has now brought the process out of the diwan-e-khaas to diwan-e-aam. Critics of his reports have been unsparing but are they right? 

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Economic Times 2002

48. Welcome Aboard Mr. Stern: Abandoning the exclusive focus on the rich country protectionism and complacency towards the poor country protectionism, the World Bank Chief Economist has now forcefully condemned the latter. This is good news.  But the World Bank also needs to pay attention to the nuances while propagating the view that agricultural subsidies and protection in the rich countries inflict huge injuries on the poor countries. The removal of these intervention will no doubt benefit the developing countries as a whole but it will also hurt the majority of the poorest countries. 

47.  A tax system for the 21st century: In less than two months, the Kelkar taskforces on direct and indirect taxes have spoken. They propose to overhaul the Indian tax system. The question is whether Jaswant Singh will show the necessary courage.

46.  Tackling the Crisis in Higher Education: Besides, railways and nuclear power, the only state monopoly remaining in India is the one on issuing university degrees. Universities in India can be established only by an Act of Parliament, Act of a State Legislative Assembly or by the University Grants Commission (UGC) "deeming" an institution university. UGC centrally controls all major functions of universities and colleges. Not surprisingly, the Indian higher education system is in a quiet crisis on both quantity and quality dimension. 

45.  Experimenting in economics: This year's economics laureates — economist Vernon Smith of George Mason University and psychologist Daniel Kahneman of Princeton University — have both been pioneers in the field of experimental economics. But the similarity between their contributions ends there.

44.  A case for import substitution?: Does evidence point to ISI leading to a golden age of growth in developing countries and liberal trade policies, deregulation and privatization going no where? 

43.  Resolving the RBI dilemma: RBI foreign exchange reserves now exceed $60 billion. Must it keep accumulating or there are other alternatives? Read on for some answers.

42. Potentially disabling aid: Are the calls for raising aid flows to 0.7 percent of the industrial countries' GDP grounded in proper analysis? Have those making the calls offered a roadmap of how they can use this larger amount effectively to promote the Millennium Development Goals?

41.  Is this free meal worth having?: Under the Generalized System of Preferences (GSP), developed countries grant one-way tariff preferences to developing countries.  But the experience with these preferences has been even less encouraging than that with aid.

40.  Why India lags behind China?: Skeptics say that exports have not responded to trade liberalization. Are they right? And even if they are wrong, why has the response in India been more muted than in China? Here is one hypothesis. 

39b.  Dump the anti-dumping?: India is now the top ranking user of anti-dumping. The Economic Times asked three specialists to write on "Should anti-dumping be dumped?" My take: This is a no-brainer. WTO members should jointly agree to outlaw the use of this self-destructive weapon. But should they fail to do so, countries should unilaterally discard it from their arsenals. 

39.  Stamping in Nutrition: “THE poor are a gold mine,” wrote economist Thomas Sowell two decades ago, arguing that often anti-poverty programmes benefit those who administer them rather than those for whom they are administered.  India’s food procurement, storage and distribution system lends unequivocal support to Sowell's contention: Out of every Rs. 100 spent on food subsidy in India, only Rs. 3.70 reached the poor in the year 2000-01.

38.  The right recipe: Those of you old enough to remember Mother India, the first Indian film to be nominated for an Oscar, would remember its hero Sunil Dutt sitting on top of a mound of grain and trying to keep the villain from taking it away. Well, gone are the days. We now have the Food Corporation of India sitting on top of a mountain of grain, trying to keep the rains from washing it away. How did we arrive here? What should be done?

37. On Generating Employment: Because of its large and growing population, the threat of “employment problem” is never far from the minds of policymakers in India. Yet, there are good reasons for the ambivalence of economists towards such a threat. The old saying that the child is born not just with a mouth to eat but also two hands to work carries much wisdom.

36.  Redeem Last Year's Promises: Last year, in what was a truly historic budget, Finance Minister Yashwant Sinha had announced several major reforms.  But the Vajpayee government utterly failed to deliver on them.  The forthcoming budget must offer credible commitment to undo this failure. 

35.  New Year's Day Special: The Economic Times invited three economists (Jagdish Bhagwati of Columbia University, Kaushik Basu of Cornell University and Arvind Panagariya of the University of Maryland) and two industrialists (Azim Premji of Wipro and R. Seshasayee of Ashok Leyland) to address five questions relating to the economy, wish-list for 2002, public-private partnership, public morality and future for India.

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Economic Times, 2001

34.  Barriers to Scholarship in India:  Our persistence in obstructing foreign scholars and scholarship in India is unfortunate. We continue to subject all research projects by foreign scholars to an elaborate approval process involving one or more ministries.

33.  India Arrives at the WTO :  If you were at the summit and heard the frequent assertions in the corridors and the pressroom that India was hell bent to bring down the launch of the new round, you would likely believe the harsh assessments that appeared subsequently in the Western press.   But did India truly fair so poorly?

33b.  India at Doha (2):If victory and defeat were judged by juxtaposing the initial objective and final outcome, India suffered an unequivocal defeat in Doha. But by that count, Doha produced no winners.

32.  Milton Friedman on India in 1955 “A FIVE per cent per annum rate of increase in real national income seems entirely feasible...” If these opening words in a memorandum addressed to the government of India do not impress you, think again: the date on the memorandum is November 5, 1955 and its author is Milton Friedman, the 1976 Nobel Laureate in Economics.

31.  Nobel Prize, 2001: This year, I successfully predicted all three Nobel laureates and surprising a figure no less than Professor Assar Lindbeck, the chairman of the Nobel Committee from 1980 to 1994.

30.  Rigid Labor Laws: a Minor Barrier to Growth?:  “Removing the main barriers to growth would free India’s economy to grow as fast as China’s, at 10% a year.”  This is the central conclusion of a recent report entitled “Achieving India’s Economic Growth Imperative” by the McKinsey Global Institute.

29.  Launching the Qatar RoundIndia has expressed its clear opposition to the launch of a new round of multilateral negotiations at the forthcoming WTO ministerial in Qatar.  India’s position is not without justification.  Yet, unless intended to be an interim, tactical move, it can hurt our ultimate interests.  We have much to gain from a new round provided we actively engage in shaping its agenda.

28.  Savouring a Decade of Reforms:  THIS month marks the end of the first decade of India’s economic reforms. What have we accomplished? In this feel-good piece, I demonstrate that the focus on incremental reforms in individual years results in an understatement of the totality of India's  achievements.

27.  Why did Singapore and Hong Kong Escape Protection?:  Singapore and Hong Kong have been the most open economies in the world during the past fifty years.  How do we explain this success of the two economies during a period when all other developing countries found themselves resorting to protection?

26.  The Indian Diaspora in the United States:  Can the Indian Diaspora play the same role in the economic transformation of India that the Chinese Diaspora has played in the People’s Republic of China (PRC)? 

25.  Korean Growth Experience:  The contribution of infant industry protection to Korea’s growth is at best controversial and at worst negative. But even if one accepts it to be positive, there are two reasons why it is safer today to err on the side of non-intervention.

24.  End the State Monopoly on Higher Education :  Last month, when I wrote that public-sector monopoly in India had been abolished in virtually all sectors except railways, I made one major error of omission: higher education.

23.  Fertiliser Subsidy:  We spend more than 0.7 per cent of India’s GDP on fertiliser subsidies. This is almost twice the entire amount we spend on higher education.

22.  Unshackling the Old Economy :  The major new stimulus to growth must come from further freeing up of the Old Economy, which lags behind the unfettered New Economy.

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Economic Times, 2000

21.  The Shoe is now on the Other Foot:  In a recent report entitled Unfair Advantage: Workers' Freedom of Association in the United States under International Human Rights Standards (August 31, 2000), Human Rights Watch offers a stunning indictment of the laws governing worker rights and their enforcement in the United States.

20.  Defending Free Trade:  Mathematician Stanislaw Ulam once asked economics Nobel Laureate Paul Samuelson whether he could point to an idea in economics that was universally true and not obvious at the same time.  Samuelson’s response was the “principle of comparative advantage.”

19.  The New Tyranny of the Auto Industry:  We persist in ignoring the lessons of our own experience and stand ready to punish the consumer in favour of narrow, short-term industry interests. By all accounts, the government is poised to replace import licensing on used cars by prohibitive tariff duties and technical barriers.

18.  Nobel Prize 2000:  The statistical techniques of measurement, for which Heckman and McFadden have been awarded the prize, may seem esoteric to a non-specialist.  Yet, they are an indispensable part of the tool-kit of an empirical economist.

17.  Bringing Competition to Bureaucracy:  Since politicians usually lack specialized skills, the burden of policy making often falls on the top layer of bureaucracy.  But what if top bureaucrats themselves lack these skills? We then run the risk of blind leading the blind.

16.  A Golden Opportunity For IndiaDuring his forthcoming visit to the United States, Prime Minister Atal Behari Vajpayee will have an unusual opportunity to promote the Indian viewpoint among the U.S. leaders and policy makers on issues of mutual interest to the two nations.

15.  Exit Policy:  The ban on retrenchment has produced few winners.  Under the threat of strikes, it has forced firms to tolerate extreme inefficiency.  The ban also discourages entrepreneurs from seeking entry into labour-intensive sectors and employing labour-intensive techniques. 

14.  Separating Milk and Water:  The calls for very large duties on imports by Prakash Singh Badal, the chief minister of Punjab, are misplaced.

13.  The Anti-reform Lobby Has Got It WrongWhile Prime Minister Vajpayee and Sinha must fight their own battle with the Swadeshi Jagran Manch, the gratuitous attack by the critics on the left is altogether a different matter.

12.  The World Bank under Fire:  The Meltzer Commission has harsh words for the manner in which the World Bank has served the poor in developing countries in recent years.

11.  Consensus Building and Nehru :  In spite of the public confidence he enjoyed, or perhaps because of it, Pundit Nehru used every opportunity available to him to explain to the lay public and intellectuals alike the rationale behind the big economic initiatives he had been undertaking or planning to undertake.

10.  Time to Return to Trade Reform : India's tariff liberalization has come to a virtual halt.  It is time to resume it in the 2000 budget.

9.  Yes to IPRs, No to their Inclusion into the WTO :  The TRIPs Agreement has become an effective instrument of promoting more non-trade agenda by labour and environmental groups.  They say the WTO must now do for workers and nature what it has already done for corporate interests.

8.  My Millennium Wish: Double-digit Growth The road will be much rougher as reforms move into difficult areas such as banking.  Nevertheless, the double-digit growth appears well within the grasp of the country.

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Economic Times, 1999

7.  Seattle:  A Failure without Losers: Given where the round was heading, even pro-free-trade economists such as myself are relieved for the moment

6.  The Return of Labour Standards in the WTO? With the Seattle Ministerial meeting right around the corner, the United States has tabled a proposal for a working group on labour standards at the World Trade Organization (WTO).

5.  WTO Negotiations:  Invest in Research:  Even large developing countries such as India seem to lack the capacity for systematic research on how best to promote their interests in trade negotiations.

4.  Narrowing Down the Seattle Round Agenda:  Defining the agenda is the first stage of a negotiating game, which every player must take with utmost seriousness.

3.  “Extravagant” Predictions of Benefits to developing Countries from the Uruguay Round: Jagdish Bhagwati had warned even as the Round was approaching closure that appeals to overly optimistic predictions could undermine future trade liberalization.

2.  E-commerce:  How can developing countries maximize the benefits from the Internet and how should they approach the issue at WTO?

1.  Anti-dumping: Let Us Not Shoot Ourselves in the Foot:  Anti-dumping is turning into a lethal instrument of protection in India.  Does its aggressive use make sense?

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Economic Times 1998

-1.  Dealing with investment in WTO: On a net basis, developing countries play the role of the `host' country to foreign investment while developed countries serve as the `source' country. This asymmetry leads to a divergence in the interests of developing and developed countries. Thus, the issue has a clear North-South dimension.

-2.  WTO and Developing Country Interests: The Uruguay Round (UR) Agreement stipulates that, beginning January 1, 2000, WTO members will launch a round of negotiations for trade liberalisation in agriculture and services. With that date approaching, there is now a talk in international policy circles of a millennium round of multilateral trade negotiations (MTNs). How should the developing countries such as India approach this development?

-3.  Full convertibility: Must we have it?Should India embrace full capital account convertibility in the near future? And was Prime Minister Mahathir of Malaysia wise to reintroduce controls in the wake of a crisis? The answers to these questions are asymmetric: while India is well advised to wait before entering the world of convertibility, Mahathir was ill advised to exit it.

-4.  Is India returning to protectionism? If Mr. Sinha is serious about reclaiming the trade reform for the country, he must resist pressures from the industry for lower excise duties and also explain to the public that when tariffs are reduced, increases in excise duties overall are entirely consistent with reforms.

-5. SAARC: Follow APEC, not NAFTA:  Despite much enthusiasm on the part of some regional leaders and policy analysts, the creation of a discriminatory trade bloc in the region, dubbed the South Asian Free Trade Area (SAFTA), along the lines of the NAFTA will be a mistake. The region's interests will be served by following the APEC model which calls for full adherence to the Most Favoured Nation (MFN) principle and, hence, nondiscrimination in trade policy.

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Wall Street Journal and New York Times

7.  Ending Aid to Rich Farmers May Hurt the Poor Ones By EDUARDO PORTER (NY Times): This story features my analysis of the agricultural subsidies in the rich countries and their impact on the poor countries.

6.  Fuzzy Trade Math.  Trade talks at Cancun broke down principally because the G-20 group of mainly larger developing countries rejected U.S. and EU offers on reducing their agricultural protection. Two years later, as the Hong Kong Ministerial approaches, agriculture remains the make-or-break issue in the Doha negotiations. But the impasse can be broken.

5.  A Passage to Prosperity: The right strategy for India is to walk on two legs: traditional labor-intensive industry and modern IT. Both legs need strengthening through further reforms; and four specific reforms are of special importance.

4. The bra in your wardrobe: The longstanding Multi-fiber Arrangement (MFA) on Textiles-next to agricultural subsidies and trade barriers the most objectionable trade-restricting affliction of the world trading system-will finally become history on Jan. 1, 2005. The textile lobbies in many rich, and in some poor, countries are scrambling already to resurrect its protective effects in alternative ways: for the removal of the MFA means that the rich countries will face more competition; as will those poor countries, with no inherent ability to compete, that had developed production simply because they had a guaranteed MFA quota.

3.  Can Dr. Singh Cure his Economy? In May 2004, when India unexpectedly voted into power the Congress and its allies (later renamed the United Progressive Alliance) and Manmohan Singh became prime minister, it was a dream come true for proponents of economic reform.  Four months into the UPA rule, prospects are less rosy. GDP growth, which had touched 8% in  2003-04, is set to decline to 6% this year. Inflation, at 3.4% in 2002-03 and 5.4% in 2003-04, has edged up to 7.5%.  Will Dr. Singh repeat his innings of the early 1990s?

2.  Great Expectations (May 24, 2004): The BJP got voted out of power not because its reforms left the poor behind--they did not--but because the success of the reforms in raising the incomes of all including the poor gave rise to a revolution of rising expectations. 

1.  Rich Man, poor Man (September 16, 2003):  Just prior to the Cancun WTO Ministerial, a compromise on access to medicines for poor countries had raised hopes that the Developed and the Developing could resolve their differences after all-and that the Doha Round might actually move forward. But the talks at Cancun have collapsed and the opportunity is lost. But Cancun is no Seattle. At Seattle, the WTO members tried and failed to launch a new round whereas at Cancun they have failed to move an ongoing round forward. The more apt analogy is with the failure in Montreal in 1988 when developed and developing countries had failed to advance the Uruguay Round.

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Financial Times

15.  The pursuit of equity threatens poverty alleviation: Critics of pro-market reforms increase inequality and this in turn is driving the citizens of China, India and Latin America away from reform.  The conclusion is based on faulty analysis of the evidence.

14. Exchange with the Oxfam on agricultural liberalization by the developing countries.  The gains from specialization exist in agriculture, too.  Just as the countries that liberalized in manufactures benefited those that liberalize agriculture will benefit as well.    

13. Higher food prices will indeed hit poor (Letter, August 12, 2004): William R. Cline's reaction (Letters, August 9) to my exposure of the fallacy that the removal of the rich country subsidies and protection in agriculture is desirable because it will do most good to the least developed countries (LDCs) is to deny the fallacy by assertion.

12. The tide of free trade will not float all boats (Op-ed, August 3, 2004): Thanks to the advocacy of a few pressure groups and many international institutions, there is now a near-universal agreement that developed country subsidies and protection in agriculture hurt the poorest, least developed countries. This is a telling example of how political correctness can lead to the acceptance of an economically incorrect proposition.

11. Countries that react to growth opportunities by opening up will enjoy sustained success (Letter, May 10, 2004). Martin Wolf ("How managing growth can consign poverty to history", May 5) is right on the mark when he points out that trade openness is a necessary, even if not sufficient, condition for sustained, rapid growth. Ironically, some globalisation advocates have ended up hurting their cause by suggesting indirectly that trade openness by itself is sufficient to raise the growth rate.

10. World Bank and IMF show welcome revisions to stance on developing countries and trade: (Letter with Jagdish Bhagwati, December 24, 2003): Sir, The article by Horst Kohler of the International Monetary Fund and James Wolfensohn of the World Bank in support of the multilateral trading system and the Doha round is welcome, especially as it belatedly repairs important sins of commission and of omission by these Bretton Woods institutions ("We can trade up to a better world", December 12). 

9. Bilateral Trade Treaties are a Sham: (Op-ed with Jagdish Bhagwati, FT July 13, 2003) Bilateral deals fragment the coalitions of developing countries, as each abandons its legitimate objections to the inclusion of extraneous issues in trade treaties. Having abandoned these objections in a bilateral deal with the US, how can those countries pursue them in WTO negotiations?

8.  A Trojan Horse for Africa:  (Op-ed with Jagdish Bhagwati) The Africa Act offers more to US lobby groups than to participant countries.

7.  The Truth about Protectionism: (Op-ed with Jagdish Bhagwati) just as the Jubilee 2000 movement triumphed where many exhortations to give debt relief had failed, we could now count on a church-led movement, a Jubilee 2010, to do the same for ending rich countries' protectionism.

6.  NAFTA has harmed the Cause of Free Trade : (Letter) You seem to accept too readily the conclusion in the recent World Trade Organisation report that these agree­ments have been "complemen­tary" to multilateral liberalisation ("WTO's blessing for trade groups", April 27). Surely, this conclusion is unwarranted.  

5.  Free Trade Target Date Essential to Remove “Spaghetti Bowl” of Barriers: (Letter) As economists deeply interested in the future of the world trading system, we and a group of economists worldwide would like to urge the member states of the WTO to make the endorsement of a target date for free trade their first priority.

4.  FTAA and President Kennedy: (Letter) This provides an opportunity to re-think the issue and to convert the original goal of free trade only for the Americas into a co-operative regional agreement (like Apec) and simultaneously to pressure trade liberalization multilaterally at the World Trade Organization.  That is the model, also of President Kennedy’s celebrated, but premature, Alliance for Progress for South America.

3.  Integration Can Help Reduce Poverty and Act as Force to End Child Labor: (Letter) In Bangladesh, the garments industry, which had expanded greatly with exports due to global integration, played a major role in reducing the country's poverty. And ironically, it was the threat of "anti-globalization" sanctions from US, rather than globalization, which harmed the children.

2.  WTO: US Demands Threaten Seattle Meeting:  (Letter) The US demand for a World Trade Organisation working group that will draw up a report in two years on the relationship between international trade and labour standards risks scuppering the Seattle ministerial meeting.

1.  Poverty Reduction Starts with Growth: (Letter) It is possible to immediately reduce poverty by redistributing from a fixed pie. But even that must be discounted when the pie is small and poor are many. Give every Indian his country's per-capita income and you will have him living on a dollar and 10 cents daily.

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Times of India and Hindustan Times

1.  India: U.S. Action under Super-301: On May 25, 1989 U.S. declared India, Brazil and Japan to be “unfair traders” under Super-301.  Specific charges were brought against each country.

2.  Liberalise Consumer Goods Imports: Though liberalization of consumer goods im­ports has been controversial, at present, the case for it is impeccable.

3.  The Myths and Realities of Neem-Based Patents: Can Neem be patented?  If not, what is the controversy surrounding patents based on Neem products?

4.  Child Labor and Rugmark Label:  While rejecting the case for a social clause, however, many developing country critics of child labor have suggested that alternative strategies be adopted to combat the practice.  Among these is the use of “social labeling” which effectively gives the consumers the option to refuse to buy goods produced by child labor.

5.  Walking on Two Legs: If we go by the latest census data, as late as 2001, 77 per cent of India's population lived in rural areas and 59 per cent earned its living from farming. Given farming generates less than a quarter of the national income, it offers a significant proportion of the farmers barely the subsistence income. I have argued for some time now that if India is to transform itself from this primarily agricultural to modern economy, it must walk on two legs: unskilled-labor-intensive manufacturing and skilled-labor-intensive services

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Economist

5. Economics Focus: Punch-up over handouts: Free-trade economists question the widely held view that the removal of rich country subsides will benefit the least developed countries.

4.  Economics Focus: Trade Disputes: Might the new wave of outsourcing to poor countries be different from trade in manufacturing, and make rich countries poorer? A paper by Jagdish Bhagwati, author of a recent book on globalisation, Arvind Panagariya, his colleague at Columbia University, and T.N. Srinivasan of Yale provides more help. They show, also using classical trade models, that outsourcing is no different in economic terms from the trade that has been going on since Ricardo's time. The standard results still hold.

3.  Going too Far in Support of Trade: Economics Focus column of the Economist, December 14, 2000, which covered the paper The Case Against Export Subsidies by Arvind Panagariya.

2.  Stumbling Blocks : (Letter in Economist) Criss-crossing FTAs are replacing non-discriminatory tariffs with a spaghetti bowl whereby tariffs vary according to the ostensible origin of the product...FTAs also lead to increased protection against outside coun­tries, turning even an initial movement towards free trade into a movement away from it.

1.  Trading Views: (Letter in Economist) You note that Mexican exports to the United States have surged in the past two years. You also note that only 117,000 Ameri­can workers have come forward to claim the benefits offered to those displaced by NAFTA. These facts together strongly suggest that much of the NAFTA-induced growth in Mexico's exports has come at the expense of other countries and thus con­stitutes trade diversion.

Times Higher Education Supplement

2.  A Current Account of ActivityReview in the Times Higher Educations Supplement of The World Bank: Structure and Policies edited by Christopher L. Gilbert and David Vines.  No multilateral institution suffers more from an identity crisis today than the World Bank.  Globalization has brought private capital to the doorsteps of most developing countries, seriously undermining the Bank’s central function—development lending. 

1.  Why did the Chicken Cross the Globe?: Review in the Times Higher Educations Supplement of On the Edge edited by W. Hutton and A. Giddens. The book offers a dozen essays on “global capitalism”, ranging from insightful and incisive to ill-conceived and ill-argued.  The authors include sociologists, international finance experts, policy analysts and journalists from the rich countries and a well-known activist from India.

India Today

2.  A Vision for 2010: Guest column for a special issue of India Today, February 19, 2001.  Where are we likely to be in 2010? Our growth rate during the next 10 years is likely to average 6 to 7 per cent. This is the same rate I had predicted in 1994 for the decade of the 1990s. With growth rate in 1993-94 at a measly 3.8 percent, the prediction was viewed as hugely optimistic at the time; today, with the economy already growing at 6 per cent, it is likely to be viewed as pessimistic.

1. Plenty's Scarcity: Review in India Today of Eight Lectures on India’s Economic Reforms by T. N. Srinivasan.  These eight gems, cut and shaped to perfection by a master craftsman, offer the reader a panoramic view of the economic reforms undertaken by India since 1991 and those that still await it.

Outlook

4. It's a big world out there: Where does India stand in the global trading system after ten years of the existence of the WTO?  The report card is at best mixed.

3. At the Half-way Mark (July 12, 2004): The key question while assessing the first United Progressive Alliance (UPA) budget is whether it indicates that the progressive, pro-reform wing of the Congress—which the prime minister and the finance minister represent—remains truly in charge of policy.  The answer to this question is a qualified and cautious yes.

2. Don't Prick the Bubble (May 31, 2004): It is nonsense to pin the anti-NDA vote on to the reforms and not anti-incumbency.

1. It is the Reforms, Stupid!: Guest column for a special issue of Outlook, December 17, 2001.  Is the Indian economy as immune to the current slowdown in the global economy as some press reports and commentaries suggest?  And should we be thanking our policy makers for holding back reforms, rapidly approaching inaction, to bring about the presumed stability?

 

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