ET2003 ⁽¹²⁾

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?The question “have the reforms failed India” at a time when optimism in the country is at its peak seems out of context if not outright silly. Yet, this is precisely the challenge reforms-skeptics have posed recently. Read full article The question "have the reforms failed India" at a time when optimism in the country is at its peak seems out of context if not outright silly. Yet, this is precisely the challenge reforms-skeptics have posed recently. For instance, distinguished economists Bradford DeLong of…

Can the lower interest rates, favorable demographic transition and home-grown multinationals really deliver the Indian miracle? Happy dreams... Economic Times, November 19, 2003 There is a sudden optimism bordering on euphoria that India is poised to match, even beat the Chinese miracle. Pundits are betting that the decline in the interest rates, the expected rise in the proportion of the young in the total population, and the existence of homegrown multinationals guarantee a rapid transformation of India into a modern economy. Is this healthy optimism or wishful thinking? I have argued for some time now that a double-digit growth rate necessary to achieve the rapid transformation is well within India ’s reach. Yet, without some key reforms on which we have been dragging our feet for some time, such transformation is a pipedream. Rapid transformation requires massive movement of the labour force out of agriculture, which requires a double-digit growth of traditional industry, and hence reforms. Today, 65% of India ’s labour force is in agriculture in comparison to China ’s 25%. Industrial output in India accounts for 27% of GDP…

What does WTO really do to be decried as the "World Terrorist Organization" by a rally supported by three former Prime Ministers of India? Economic Times, October 22, 2004 Immediately preceding the Cancun conference, three former prime ministers—H.D. Deve Gowda, I.K. Gujral and V.P. Singh—lent their support to a rally decrying WTO as the World Terrorist Organization. Deve Gowda and Gujral had served as prime ministers after the birth of WTO on January 1, 1995 and therefore had the opportunity to withdraw from it. They did no such thing perhaps because they knew that India benefited hugely from the membership. But now that they are in the opposition, they must not feel the same responsibility any longer. That WTO is beneficial should be obvious from the fact that as many as 148 countries are its members today. China made very substantial concessions to join it two years ago and Russia is waiting in the queue. While new members have steadily been added, few have exited the institution. Why member governments nearly universally view WTO as beneficial can be best appreciated by understanding what it does.

India's role in the WTO negotiations has turned less negative but it has some ways to go.Apropos of “If this is success, what will be failure?” by Arvind Panagariya (ET, September 24) the standard theory of Nash bargaining says that it is not fairness, but the selfishness of players that ultimately guides negotiations. Read full article Abstract: Apropos of "If this is success, what will be failure?" by Arvind Panagariya (ET, September 24) the standard theory of Nash bargaining says that it is not fairness, but the selfishness of players that ultimately guides negotiations. That was very evident in US positions when it backtracked from the Doha meet held during Clinton's presidency. The US national agenda then did not include assistance to farmers, but the Bush administration wants that. As for India, it is untrue that we succeeded at Cancun just on the strength of non-cooperation with the OECD nations. Our economy is inefficient, markets incomplete, and we had nothing to offer — other than strident negotiating positions! Developed economies lobbied by saying they were protecting their "transparent" economies, but we just…

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. Economic Times, August 27, 2003 The ongoing cola controversy offers a fascinating example of a responsible non-governmental organisation (NGO) advancing the cause of public policy in a globalising, democratic, developing country. Begin by considering the broad facts. On August 5, 2003, the New Delhi-based NGO, Centre for Science and Environment (CSE), announced that according to its tests, 12 colas produced by multinationals Coke and Pepsi contained pesticide residues 11 to 70 times as high as the norms prevailing in the European Union (EU). CSE explicitly acknowledged that the colas adhered to the local, Indian norms but argued that the multinationals practised double standard, selling less clean cola in India than in the EU and US. The reaction to the CSE announcement was swift, with three states banning the colas and Parliament banishing them from its cafeterias. CEOs of Coke and Pepsi rushed to the defence…