Economic Times ⁽²¹⁸⁾

(Full text and external link unavailable) 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. Why should those of us who support free trade be hesitant to support free currency convertibility? The answer is provided by Professor Jagdish Bhagwati of Columbia University in an article provo-catively titled ``The capital myth: the difference between trade in widgets and dollars''. Writing in the May/June, 1998 issue of Foreign Affairs, Bhagwati argues that while free trade has been shown to generate net positive benefits, evidence of similar gains from free capital mobility has simply not been provided. There is a tendency on the part of many to present capital mobility as an all or nothing choice. Yet, many forms of capital flows can and do take place without free currency convertibility. The Resurgent India Bonds, foreign direct…

(Full text and external link unavailable) 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.

(Full text and external link unavailable) 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.