Economics, Politics and Public Policy in East Asia and the Pacific
Author: Geethanjali Nataraj, NCAER
As developed countries struggle to recover after the global recession and try to confront the looming sovereign debt crisis in Europe, big emerging markets are now driving global growth.
Given the slow down in developed countries, emerging economies are trying to boost domestic demand to sustain growth — and this is particularly the case in China. Read more…
Author: Geethanjali Nataraj, NCAER
The time has come for India to realise its potential as a major destination for foreign direct investment (FDI).
Forbes puts India at 77th place — ahead of China at 90th place — in its 2010 list of the best countries for business. Equally, the UN Conference on Trade and Development report World Investment Prospects Survey 2010–2012, and the AT Kearney FDI Confidence Index 2010 rate India as the second most promising country for investment and business. Read more…
Author: Geethanjali Nataraj, NCAER
The proliferation of regional trade agreements has continued unabated since the early 1990s. In recent years, this has led to widespread debate on the advantages or disadvantages of regionalism over multilateralism.
The debate stems from the increased use of regional trade agreements (RTAs) in a world now ruled by an improved and disciplined multilateral trading system. Read more…
Author: Geethanjali Nataraj, NCAER
The Doha round of the WTO launched in September 2001 is yet to conclude.
The stalemate is largely due to the reluctance of both developed and developing countries to move from their established positions on issues related to trade-distorting agricultural subsidies and non-agriculture market access (NAMA); in particular, reduction in industrial tariffs. Read more…
Authors: Geethanjali Nataraj and Anjali Tandon, NCAER
While China’s stellar export performance is a well established fact, the issue of export diversification continues to be debated. There are differing opinions on the factor proportions in its exports. Some argue that exports continue to be labour intensive while others have found a reallocation in favour of more skill based and sophisticated exports.
Much of the strong export performance of China’s merchandise exports during the 1990s had accrued due to labour intensive products. Read more…
Author: Geethanjali Nataraj, Ministry of Finance, Policy Research Institute, Tokyo and NCEAR, New Delhi
The global surge in Regional Trade Agreements (RTAs) has continued unabated since the early 1990s. India was an exception to this trend for many years. But the non-conclusion of the Doha round and tedious negotiations at the WTO have forced India to join the RTA bandwagon.
In 1991, India decided to aggressively increase trade and strategic relations with South East Asian countries as part of its ‘Look East’ policy. The aim was to build upon historical and cultural ties to expand markets, counter Chinese influence in the region and improve India’s standing as a regional power. This ‘Look East’ policy has allowed India to grow economically and strategically. Read more…
Author: Geethanjali Nataraj, NCAER
Since the last World Trade Organisation (WTO) ministerial meeting in Hong Kong in 2005, the WTO Doha negotiations have remained at an impasse. Negotiations continue to be unbalanced with developing countries still being offered a raw deal.
The stalemate is largely over developed countries’ reluctance to make considerable reductions in their trade distorting agricultural subsidies and unbalanced proposals for further reductions in industrial tariffs. Read more…
Author: Geethanjali Nataraj
Japan and India are two of the largest democracies in Asia, sharing a commitment to the rule of law and respect for human rights. They are also leading economies in Asia.
In recent years, the two countries have strengthened bilateral ties through new initiatives and programmes ranging from economic and cultural linkages to defence and security. Japan gives 30 per cent of its overseas development assistance to India and is, even in this period of global economic downturn, committing more than $4 billion to the Delhi-Mumbai Industrial Corridor. But our economic relationship is still far below its potential. Two-way trade ($10.18 billion for 2007-08) has risen in the last five years, but still remains considerably low when compared with the China-Japan trade or even the India-China trade (respectively, $237.193 and $37.931 billion in 2007-08). Similarly, Japan’s foreign direct investment in India for March-April 2008 ($0.82 billion) ill compares to its investment in smaller Asian countries such as Vietnam ($0.41 billion), not to mention China ($1.9 billion).
Author: Geethanjali Nataraj, NCAER, New Delhi
The Foreign Direct Investment (FDI) environment in India has undergone a sea change since the inception of economic reforms in 1991. The positive changes can be particularly attributed to the evolving policy framework. The government now acts as a ‘facilitator’ of private investment by creating an enabling environment. It bridges the gaps in critical infrastructure to encourage investment and acts as a ‘partner’ to the private sector in ‘public-private partnerships’ (PPP). There has been a widely accepted view that FDI flows to India would accelerate over time given the positive medium to longer-term prospects for the economy. The performance so far has been encouraging.
According to the A.T. Kearney 2007 Report on the FDI Confidence Index, India continues to rank as the second most attractive FDI destination, with China as number one and the United States as number three. India displaced the United States in 2005 to gain number two position which it has held ever since. FDI inflows in 2006 reached US$19.6 billion. In 2007, total FDI inflows in India stood at US$23 billion showing a growth rate of 43.2 per cent over 2006. This is a positive sign and even the ratio of India’s FDI Inflows to China’s inflows has been consistently increasing since 2000 with Indian FDI rising from a few per cent of China’s FDI inflow to 25 per cent in 2007.