ET2005 (13)

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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.Kamal Nath may take the lead and call a mini-ministerial conference to complete the modalities of negotiations. Read full article 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

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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.Economic Times November 30, 2005. As the sixth WTO ministerial conference to be held in Hong Kong during December 13-17, 2005 approaches, the European Union (EU), the US and the group of 20 mainly larger developing countries are deadlocked over the Doha negotiations on agriculture Breaking the deadlock requires dispelling several myths spread by the press, international institutions and non-governmental organisations. Among the myths are: rich countries annually spend hundreds of billions of dollars on trade-distorting subsidies; agricultural protectionism is largely a rich country phenomenon; and the least developed countries (LDCs) are the worst victims of these subsidies and protection. Twice recently the New York Times has editorialised that “developed world funnels nearly $1 billion a day in subsidies,” which “encourages overproduction” and drives down prices. The World Bank president Paul Wolfowitz similarly referred to developed countries expending “$280 billion on support to agricultural producers” in a recent…

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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.Economic Times October 19, 2005 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 centre 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. That would be impossible since the slogan “Our dream is a world free of poverty” is prominently displayed on virtually all walls of the opulent World Bank building. But the report contends that the pursuit of equity speeds up the elimination of poverty. “Equity enhances…

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The Challenge before Pascal Lamy

Substantive liberalization under the Doha Round is possible but not without developing countries making reciprocal concessions. ECONOMIC TIMES: SEPTEMBER 21, 2005 Pascal Lamy, the new director-general of the World Trade Organisation (WTO), has begun to set the agenda for the Doha Round negotiations at the Hong Kong ministerial meeting during December 13-18, 2005. Recognising the vast differences that remain among participants, he has publicly stated what has been known for some time: contrary to the original deadline, the round will not be concluded by December 31, 2005. Instead, Lamy has urged the member countries to forge an agreement at Hong Kong that would bring them two-thirds way to the final agreement. He has proposed the members complete the remaining one-third of the task by the end of 2006. That would still close the round two years faster than the predecessor Uruguay Round and is therefore an ambitious undertaking. Lamy faces a truly uphill task. A relatively recent development that adds to the challenge he faces is the sophistication, organisation and coherence that developing countries have achieved in articulating their demands…

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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.India has to lower its fiscaldeficit and the best way to do that is by both raising tax revenues and cutting expenditure. Dogmatic insistence on just one route to fiscal discipline is ill-advised, says Arvind Panagariya Read full article Most analysts agree that India must urgently bring its gigantic fiscal deficit down. The rare exceptions occur only in the context of the defence of specific, favourite expenditure proposals. For instance, Mrs Sonia Gandhi and the Left parties would sacrifice deficit reduction if it means a compromise on the National Employment Guarantee scheme. Likewise, between higher expenditure on infrastructure and lower fiscal deficit, the Planning Commission deputy chairman would probably opt for the former. But in the broader macroeconomic context, even these exceptions yield to the necessity of deficit reduction. The real question confronting India therefore is how precisely to bring the deficit…

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